Account to Account: The Next Big Thing in Payment Options

While contactless payment took years to gain momentum, most people now cannot imagine life without it, and it accounts for over a quarter of all UK payments. Adoption takes time, but several “hygiene factors” make a new payment method more likely than others to become ingrained in daily life: security, speed and simplicity.

With almost a third of customers citing the security of their financial data as a critical factor in choosing their payment method, the winning online payment methods of tomorrow are will be quick and seamless with security built into their very core.

This is why many are keeping an eye on Account-to-Account payments, or Pay by Bank, as an emerging leader in payment methods. Pay by Bank covers those key “hygiene factors” – security (secure connections, no sharing of financial data), speed (a two-click process) and simplicity (no account needed, no login). 

For example, when a customer shops on a new website, instead of having to enter their card details manually, they can simply select Pay by Bank and choose to connect to their bank. They authorise the payment using biometrics (like TouchID), and the payment is made in seconds. 

With this method, there is no financial data sharing. There is no manual data entry and no need for the customer to get their physical credit card out of their wallet to check the digits. There is no online account for the customer to set up and manage. Instead, this type of payment is instant and highly secure.

Another example: a large number of payments are still taken over the telephone. Imagine a customer receiving a secure SMS message from a servicing agent while on the phone. With Pay by Bank, tapping on the secure link creates a secure connection to their bank, and the authorisation is instantly granted through biometrics. This completely removes the need to read out sensitive financial information over the phone. 

There are also multiple benefits for businesses in offering Pay by Bank and the opportunity to pass some of these benefits back to the consumer. With specific platforms, a range of rewards and incentivisation options can be integrated into the experience. This gives merchants the power to incentivise and reward customers for their loyalty, which can drive conversion and encourage future engagement.

Pay by Bank will not replace all other payment types – cards, mobile wallets, and BNPL all have their respective roles to play in a customer’s wallet. But it enhances that wallet and is a great alternative to slower, less secure and less convenient payment methods, making it one to watch.