In its 2025 Pay by Bank report, TrueLayer, Europe’s open banking payments provider, outlines a transformative vision for ecommerce payments, positioning Pay by Bank as a key innovation in the competitive checkout landscape.
Authored by CEO Francesco Simoneschi and VP Jack Wilson, the report details how Pay by Bank—built on open banking technology—is reshaping the payments ecosystem with its speed, security, and cost-efficiency.
With 27 million monthly transactions in the UK alone and TrueLayer processing over $100 billion in payments annually, Pay by Bank is gaining momentum as a viable alternative to traditional card payments.
Pay by Bank allows customers to pay directly from their bank accounts via their banking app, bypassing the cumbersome card payment infrastructure.
The process is seamless: shoppers select Pay by Bank at checkout, authenticate the payment using biometric verification, and complete the transaction in as little as 30 seconds.
This simplicity enhances user experience, reduces cart abandonment, and boosts merchant conversion rates.
The report highlights case studies, such as lastminute.com, which saw a 20% increase in average order value after integrating Pay by Bank, and Papa Johns, which reduced payment costs by over 40% while improving customer retention.
Security is a cornerstone of Pay by Bank’s appeal.
Unlike card payments, which are vulnerable to fraud and chargebacks, Pay by Bank employs strong customer authentication (SCA) and shares no sensitive data with merchants, virtually eliminating risks like card-not-present fraud.
The report challenges the notion that chargebacks are essential for consumer protection, arguing that robust merchant refund policies and existing consumer rights laws provide ample safeguards.
TrueLayer emphasizes that chargebacks, originally designed to combat card fraud, now enable refund fraud, costing UK merchants £128 million annually—costs ultimately passed to consumers.
The report also explores Variable Recurring Payments (VRP), a promising Pay by Bank feature set for a 2025 breakthrough.
VRP, or “Bank on File,” enables flexible, recurring payments for utilities, subscriptions, and ecommerce, offering consumers greater control and merchants faster settlements.
The UK’s Financial Conduct Authority (FCA) is driving VRP adoption by advocating for an independent central operator to establish a commercial framework, incentivizing banks to support open banking APIs.
This shift from a decentralized model, where banks view APIs as compliance costs, to a revenue-driven scheme is expected to unlock new use cases, from government payments to one-click checkouts.
TrueLayer underscores the need for industry collaboration to sustain Pay by Bank’s growth.
While the decentralized model spurred innovation, it limited bank investment in API development.
A proposed scheme, backed by the FCA, aims to create a standardized revenue model, balancing the interests of banks and fintechs.
This could position Pay by Bank to capture a majority of ecommerce transactions in the long term, challenging the dominance of card schemes and Buy Now, Pay Later options.
Pay by Bank is not just a payment method; it’s a movement to simplify, secure, and democratize payments, aiming for lower costs, faster refunds, and a resilient checkout experience for merchants and consumers alike.
