Heavy Emphasis on Cost of Acceptance Fuels a Shift in Strategy
With card acceptance fees continuing to rise — particularly for premium and cross-border transactions — Pay-by-Bankhas rapidly become a focal point for merchants looking to preserve margins.
As Forbes reported, 2023 was filled with activity in this space, and the momentum is set to accelerate in 2024 and beyond. Interchange fees, flat-rate charges, scheme fees, and chargebacks are all under scrutiny — especially in low-margin or high-volume verticals where these costs quietly chip away at profitability.
As Forbes reported, 2023 was filled with activity in this space, and the momentum is set to accelerate in 2024 and beyond. Interchange fees, flat-rate charges, scheme fees, and chargebacks are all under scrutiny — especially in low-margin or high-volume verticals where these costs quietly chip away at profitability.
The Problem with Traditional Card Fees
For merchants handling hundreds or thousands of orders daily, these numbers become a silent tax on growth — a fact many finance teams are now aggressively confronting.
Why Pay-by-Bank Is the Merchant's Choice
Pay-by-Bank, also known as A2A (account-to-account) payments, uses Open Banking rails to initiate direct transfers from the customer’s bank account to the merchant’s — bypassing Visa, Mastercard, and other card networks entirely.
Benefits of Pay-by-Bank Over Cards:
- No card processing fees or interchange charges
- Instant settlement (no waiting 2–5 days)
- Zero chargebacks or card fraud
- Stronger cash flow control for merchants
- Fully PSD2 and GDPR compliant
As highlighted by Forbes, major fintech providers and European payment startups have positioned Pay-by-Bank as the most logical evolution for cost-conscious merchants — especially as trust in bank-based digital flows grows among consumers.
2024–2025: Key Trends Driving Adoption
Cost Reduction Pressure: Especially among marketplaces and direct-to-consumer (DTC) brands that can't afford to lose 2–3% to card processors.
Regulatory Tailwinds: UK Open Banking adoption continues to rise, with increasing consumer awareness and usage.
B2B Expansion: Beyond ecommerce, Pay-by-Bank is gaining traction in B2B payments, invoice settlements, and subscription flows.
Platform Integration: Tools like Wallid’s Shopify Pay-by-Bank app enable instant deployment without coding, removing barriers for adoption.
Regulatory Tailwinds: UK Open Banking adoption continues to rise, with increasing consumer awareness and usage.
B2B Expansion: Beyond ecommerce, Pay-by-Bank is gaining traction in B2B payments, invoice settlements, and subscription flows.
Platform Integration: Tools like Wallid’s Shopify Pay-by-Bank app enable instant deployment without coding, removing barriers for adoption.
Use Cases Expanding Beyond Bill Pay
While bill pay remains a dominant use case (utilities, insurance, recurring invoices), Pay-by-Bank is rapidly expanding into:
What the Data Shows
Recent studies show that:
- 38% of UK merchants surveyed plan to trial Pay-by-Bank in 2024
- Card fees have increased 14% since 2021 (source: UK Finance)
- Consumers trust A2A payments more when tied to banking apps (Monzo, Revolut, etc.)
- Checkout conversions improved by 6–9% when Pay-by-Bank is positioned as a preferred, fee-free method
Strategic Implication: Reducing CAC & Increasing ROAS
Reducing card fees directly boosts your customer acquisition efficiency. Why?
Because:
Merchants that implement Pay-by-Bank often combine it with conversion-focused strategies — like embedded product recommendations or loyalty rewards — to further amplify its ROI.
Because:
- Lower fees mean more margin per order
- More margin means more reinvestment in paid media
- Faster payouts mean quicker ad campaign scaling
Merchants that implement Pay-by-Bank often combine it with conversion-focused strategies — like embedded product recommendations or loyalty rewards — to further amplify its ROI.
Conclusion: It's Not Optional Anymore
n 2025, Pay-by-Bank isn’t just a trend — it’s a practical cost-saving channel. As customer expectations shift and platforms improve onboarding, early adopters will enjoy margin protection, better customer trust, and first-mover SEO/conversion advantages.
The card era isn’t over, but for merchants serious about profitability, the smart money is moving to the bank rail.
The card era isn’t over, but for merchants serious about profitability, the smart money is moving to the bank rail.
Next Steps for Merchants:
Run a checkout A/B test with Pay-by-Bank enabled
Audit your monthly card acceptance fees — what’s the real cost?
Explore tools like Wallid to integrate Open Banking into your checkout in 1 click
Audit your monthly card acceptance fees — what’s the real cost?
Explore tools like Wallid to integrate Open Banking into your checkout in 1 click
