As older payment methods recede, pay-by-bank is emerging as a contender at the point of sale. It allows consumers to continue using the funds in their checking accounts, as they do with ACH payments, but adds greater security with real-time authentication and confirmation of payment.

Merchants, too, benefit from the security of pay-by-bank payments, because they don’t have to store sensitive consumer information. For banks, there’s a loss of interchange revenue, but they can rework their strategies to remain the most favored payment method by their customers.

Key questions discussed in this report:

• What is pay-by-bank and how does it work?
• What are the advantages of pay-by-bank for consumers and merchants?
• What are the implications of pay-by-bank for financial institutions and how can they adjust to account for those?

Companies mentioned:

Bank of America, Catch, GoCardless, Jack Henry, J.P. Morgan Chase Bank, Mastercard, Paymentus, Paypal, Trustly, Venmo, Visa, Zelle