The new pay-by-bank solutions will enable FIS and Banked customers to make payments directly between business and consumer bank accounts without needing card details, account numbers or sort codes.
FIS has partnered with an open banking solutions provider Banked to present pay-by-bank offerings to its business clients and consumers.
Pay-by-bank solutions combine the benefits of real-time payments with open banking infrastructure. Using such services, customers can initiate transactions directly from their bank account, without entering information such as card details, account numbers or sort codes through a third-party site. At the same time, third-party financial service providers receive seamless direct access to banking data needed to complete digital payments.
When using pay-by-bank services, customers choose their bank option on a merchant’s website during the checkout process. Then they are redirected to the relevant bank’s online banking portal to securely log in and authorize the payment. Once authorized, the funds are transferred directly from the customer’s bank account to the merchant’s account.
“Corporations and consumers are clamoring for solutions that move their money easier and faster, and as open banking and fraud prevention mature, FIS is in a unique position to start offering pay-by-bank solutions for both businesses and consumers. Partnering with Banked is a proof point of FIS’ commitment to bring frictionless payments to a wider spectrum of critical industries in a secure, convenient and cost-effective manner and complements the investments we’re making in next-gen payments infrastructure.”
Seamus Smith, Group President, Global Business to Business Payments, FIS
The main benefits of pay-by-bank services include reduced risk of fraud compared to credit and debit card transactions, faster and simpler checkout, potentially lower processing fees, and immediate confirmation of transactions.
Digital payments have lately become the preferred payment method for both merchants and consumers. Account-to-account (A2A) payments like pay-by-bank generated an estimated $525 billion in 2022 e-commerce transaction value. According to the 2023 FIS Global Payments report, A2A payments are forecast to grow at a 13% compound annual growth rate. FIS itself launched a cloud-based A2A platform called RealNet in 2021.