Developed in conjunction with Banked Ltd., Bank of America is set to introduce a new online payment solution called Pay by Bank. This new feature allows customers of e-commerce companies, initially in the UK, to pay directly from their bank account.
Pay by Bank transactions, which orientate around the concept of open banking, take place in real-time and require no credit or debit card details, making the process of the online checkout simpler, faster and more secure.
Since the process is contained exclusively within an account-to-account online payment, companies don’t need to obtain and store customer card data. Additional benefits to the system include streamlined reconciliation, as incoming payments are added to a company’s receivables allowing them to view everything together in one place; easier connectivity at the system uses APIs to connect to a company’s existing treasury system; and added security, as Pay by Bank leverages the customer’s bank authentication network.
The system also incurrs no card processing fees, proving it to be a cost-effective solution.
“The launch of Pay by Bank is part of our continual cycle of technology investment that helps us to keep clients at the cutting edge,” said Matthew Davies, co-head of Global Corporate GTS Sales and head of GTS EMEA at Bank of America. “The solution will support clients with creating a better experience for their own customers and help set them apart from their competitors.”
How Pay by Bank works
- A customer adds an item to their online shopping cart and proceeds to the checkout page.
- They select the ‘Pay by Bank’ payment option and then their own personal bank from the menu.
- To authenticate payment, they simply validate using their existing login credentials through their online banking platform.
- Once authenticated, the payment is sent directly from the customer’s bank to the company’s account.
- The customer is returned to the checkout page and the transaction is complete.
“The breadth and scale of our technology development comes from sustained strategic investment. We are proud to launch Pay by Bank and continue supporting clients with tools that can have a positive impact on their business,” added Andrew McKibben, International head of Technology and Operations at Bank of America.
The solution is currently available in the United Kingdom. Subsequent roll-outs will reportedly occur in other countries and regions in the near future.
