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Pay by Bank has rapidly moved from a niche payment option to an essential capability for financial institutions, as merchant demand and market confidence continue to drive widespread adoption. A new report from Token.io, in collaboration with Open Banking Expo, reveals that 59% of banks and 90% of payment service providers (PSPs) now offer, or plan to offer, Pay by Bank services, marking a turning point for open banking-enabled account-to-account (A2A) payments in the UK and Europe.<\/p>\n
The report, titled Pay by Bank: Signals and Trends, surveyed 96 participants, including banks, PSPs, third-party providers (TPPs), merchants and industry observers. The findings indicate that strong merchant appetite is powering this momentum, with 91% of merchants expressing demand for Pay by Bank and 39% describing that demand as \u201chigh.\u201d Lower processing fees, faster settlement times and higher conversion rates are among the key drivers encouraging merchants to embrace the payment method. In response, 95% of PSPs view Pay by Bank as a crucial part of their near-term product roadmap, with 40% labelling it \u201cextremely important.\u201d<\/p>\n
Banks, too, are recognising the commercial opportunity, with 42% already providing Pay by Bank services to corporate clients and a majority planning to extend the offering to retail customers. Overall confidence in growth remains robust, as 78% of respondents anticipate at least moderate Pay by Bank expansion in the UK and 88% expect the same across Europe over the next year.<\/p>\n
Todd Clyde, CEO at Token.io,<\/strong> said, \u201cThe research confirms significant appetite among all key payment stakeholders for A2A payments. Merchant demand is strong, PSPs are mobilising quickly, and banks increasingly view Pay by Bank as both a revenue driver and a core part of their product strategy,\u201d he said. \u201cThe convergence of merchant appetite, PSP agility, and bank engagement signals a turning point for the market and suggests an industry readying itself for a future where Pay by Bank is a trusted and essential part of how merchants and consumers transact in the UK and Europe.\u201d<\/p>\n Ellie Duncan, Head of Content at Open Banking Expo, said the findings reflect a market entering a new phase of growth and confidence. \u201cPay by Bank is clearly making inroads; 90% of respondents have used it personally, and its recognition as a secure, straightforward way to pay is driving adoption,\u201d she said. \u201cCombined with the industry\u2019s growing awareness of commercial variable recurring payments (CVRP), the momentum feels unstoppable.\u201d<\/p>\n The report also highlights increasing industry focus on CVRP, a Pay by Bank capability that supports recurring and one-click eCommerce payments. Nearly all TPPs and most PSPs report merchant interest in CVRP, and 62% of PSPs plan to introduce the feature by the end of 2026.<\/p>\n Another notable trend identified in the report is the growing emphasis on \u201conshoring\u201d payment services. Three-quarters of respondents said reducing reliance on overseas card schemes and payment providers is at least \u201csomewhat important\u201d to their organisation, while 29% described it as \u201cextremely important.\u201d This shift aligns with the wider European ambition to build more resilient, regionally anchored payment infrastructure.<\/p>\n The findings suggest that Pay by Bank has reached an inflection point. Once considered a promising alternative, it is now establishing itself as a mainstream payment method. As merchant adoption accelerates and PSPs and banks continue to innovate around open banking technology, the market is entering a new era\u2014one where instant, secure and data-driven account-to-account payments could redefine the future of digital transactions in the UK and beyond.<\/p>\n","protected":false},"author":35851,"featured_media":550825,"parent":0,"template":"","categories":[11395,11381,41779,29445,11368,11376,42764,11384,11397],"tags":[12663,11668,11649,12004,11438,11409,12472,11769,11549,11515,12801,11420],"class_list":["post-570714","ibsi_news","type-ibsi_news","status-publish","has-post-thumbnail","hentry","category-analytics","category-artificial-intelligence","category-banktech","category-cards-management","category-core-banking","category-digital-banking","category-digital-payments","category-payments","category-saas","tag-ai","tag-cross-border-payments","tag-digital-banking","tag-digital-lending","tag-digital-payments","tag-digital-transformation","tag-financial-inclusion","tag-financial-institutions","tag-financial-services","tag-fintech","tag-payments","tag-payments-as-a-service"],"acf":[],"yoast_head":"\n