Pay by Bank and card payments use different payment journeys, so their security characteristics differ in several areas. Pay by Bank uses an open banking journey in which the customer authenticates and authorises a payment through their bank, while card payments use card-based payment infrastructure.
For merchants, the useful comparison is not simply which method is “safer”. It is how each payment method handles customer authentication, payment information, authorisation, payment confirmation, disputes and refunds.
This guide compares Pay by Bank and card payments across these security-related areas to help UK merchants understand the practical differences between the two payment methods.
For merchants, the useful comparison is not simply which method is “safer”. It is how each payment method handles customer authentication, payment information, authorisation, payment confirmation, disputes and refunds.
This guide compares Pay by Bank and card payments across these security-related areas to help UK merchants understand the practical differences between the two payment methods.
The risks associated with card payments
When it comes to online transactions, card payments have become the norm for many consumers. However, this convenience comes with its own set of risks. One of the most significant dangers is the potential for data breaches. Cybercriminals often target merchant databases to steal card information, including numbers, expiration dates, and CVVs. Once in possession of this sensitive data, they can make unauthorized purchases or even sell the information on the dark web. This exposure is a stark reminder of how vulnerable card payments can be in today’s digital landscape.
Additionally, consumers face the risk of phishing scams that trick them into providing their card details. These scams often come in the form of emails or messages that appear legitimate. Unsuspecting individuals may unknowingly enter their card information on fraudulent websites, leading to financial loss and identity theft. The repercussions of such incidents can be far-reaching, affecting credit scores and leading to long, arduous processes of reclaiming stolen funds.
Furthermore, the concept of chargebacks adds another layer of complexity to card payments. While chargebacks can protect consumers from fraud, they can also be manipulated. Unscrupulous buyers may dispute legitimate transactions, leading to financial losses for businesses. This risk makes some merchants wary of accepting card payments, as they face increased operational costs related to handling these disputes.
Where the Security Differences Matter
The differences between Pay by Bank and card payments become clearer when security is considered across specific parts of the payment journey.
Customer Authentication
With Pay by Bank, the customer authenticates through the applicable bank payment journey. With card payments, authentication takes place through the applicable card-payment process.
The exact authentication experience can vary depending on the bank, payment provider and transaction.
The exact authentication experience can vary depending on the bank, payment provider and transaction.
Payment Information
Pay by Bank does not require the customer to enter card details as part of the Pay by Bank payment journey. Instead, the customer follows the applicable bank payment flow.
Card payments use card-payment information as part of the applicable card-payment process. The exact information handled depends on how the merchant and payment provider have configured the checkout.
Card payments use card-payment information as part of the applicable card-payment process. The exact information handled depends on how the merchant and payment provider have configured the checkout.
Payment Authorisation
Pay by Bank payments are authorised through the applicable bank payment journey. Card payments are authorised through the applicable card-payment infrastructure.
In both cases, the merchant ultimately needs the relevant payment result before proceeding according to its own payment and fulfilment process.
In both cases, the merchant ultimately needs the relevant payment result before proceeding according to its own payment and fulfilment process.
Payment Confirmation
The merchant receives the relevant payment result according to the payment provider's payment flow.
The important consideration is therefore not simply how a customer authenticates, but what payment information the merchant receives and how that information is used within the merchant's checkout and fulfilment process.
The important consideration is therefore not simply how a customer authenticates, but what payment information the merchant receives and how that information is used within the merchant's checkout and fulfilment process.
What the Difference Means for Shopify Merchants
For Shopify merchants, Pay by Bank and card payments do not have to be treated as mutually exclusive choices.
The more useful question is which payment characteristics fit the merchant's checkout and customers. Pay by Bank provides a bank-based authentication and authorisation journey, while cards provide an established card-payment journey with its own authentication, authorisation and dispute processes.
Merchants can therefore evaluate Pay by Bank alongside cards based on factors such as customer preference, payment workflow, operational requirements and the payment protections that apply to each method.
The more useful question is which payment characteristics fit the merchant's checkout and customers. Pay by Bank provides a bank-based authentication and authorisation journey, while cards provide an established card-payment journey with its own authentication, authorisation and dispute processes.
Merchants can therefore evaluate Pay by Bank alongside cards based on factors such as customer preference, payment workflow, operational requirements and the payment protections that apply to each method.
Common misconceptions about Pay by bank
Despite its many advantages, there are common misconceptions about Pay by bank that can deter consumers from utilizing this payment method. One prevalent myth is that bank transfers are slow and cumbersome. In reality, many banks now offer instant transfer options that allow for immediate transactions, making it as quick as, if not quicker than, card payments. This shift in banking technology has made Pay by bank a viable option for time-sensitive transactions.
Another misconception is that Pay by bank lacks consumer protection. While it’s true that bank transfers are generally irreversible, this does not mean consumers are left unprotected. Many banks offer dispute resolution services and support for users who encounter issues with transactions. Furthermore, the security features inherent in bank transfers, such as encryption and multi-factor authentication, provide substantial protection against fraud.
Lastly, some people believe that Pay by bank is only suitable for larger transactions. However, this payment method can be used for transactions of all sizes, from small purchases to significant investments. Many online retailers are now embracing Pay by bank, making it a flexible option that caters to a wide range of consumer needs and preferences.
Conclusion
Pay by Bank and card payments use different approaches to authentication, authorisation and payment processing.
Pay by Bank places the customer within an applicable bank payment journey, while card payments use card-payment infrastructure. The meaningful security comparison therefore depends on the specific characteristics of each method, including authentication, payment information, authorisation, payment confirmation, disputes and refunds.
For Shopify merchants, understanding these differences provides a more useful basis for choosing how Pay by Bank and card payments should work together in the checkout.
Pay by Bank places the customer within an applicable bank payment journey, while card payments use card-payment infrastructure. The meaningful security comparison therefore depends on the specific characteristics of each method, including authentication, payment information, authorisation, payment confirmation, disputes and refunds.
For Shopify merchants, understanding these differences provides a more useful basis for choosing how Pay by Bank and card payments should work together in the checkout.
