How merchants can educate customers on pay by bank and increase adoption

When it comes to payments, one of the biggest pain points faced by businesses is the combination of high transaction fees and the frustrating multi-day wait for funds to clear.

Pay by bank, also often referred to as account-to-account (A2A) payments, open banking payments, or instant bank transfers, solve these issues by moving money directly from the customer’s bank to the business, bypassing expensive card networks entirely.

While the business case for instant settlement and lower overheads is undeniable, one of the biggest hurdles is increasing adoption amongst consumers.

To unlock these revenue gains, the trust gap must be bridged by showing customers that this method is not just better for your bottom line, but faster and more secure for them, too.

In regions like Brazil and India, this shift has already happened with incredible success. Systems like Pix and UPI have become the default way to pay because they offer a frictionless, mobile-first experience that works for everyone. For participants in these markets, the benefits are universal: merchants receive their money in seconds, while consumers enjoy a payment method that is free, highly secure, and requires no manual entry of long card numbers.

These systems proved that when the benefits of speed and simplicity are clear, consumer habits change rapidly.

The challenge in the UK is that while the infrastructure for open banking is world-class, many shoppers still reach for their credit or debit cards out of habit. For a very long time, cards remained the most popular way to pay online, despite it being a clunky experience involving manual data entry and redirected verification screens.

The advent of digital wallets has reduced this friction significantly, as many shoppers now have their cards saved to their phones or browsers for one-tap payments. This convenience has solidified the card-first habit, making it even more important for businesses to demonstrate that pay by bank offers a similarly smooth experience.

While digital wallets have successfully streamlined the front-end checkout, they often still rely on the underlying card networks; by contrast, pay by bank offers the same mobile-first ease while bypassing those legacy layers for a more direct, secure connection.

However, many consumers do not realise that A2A payments are actually more modern, using the same bank-grade security, like facial recognition or a fingerprint scan, they already use to log into their banking apps every day.

That being said, momentum is certainly building; the latest report from the OBL revealed that open banking has 17.5 million user connections, and in January 2026, open banking payments rose 4.3% month on month to £36.04 million.

But adoption challenges remain. A recent 2026 Yaspa Index revealed that specific familiarity with the term 'pay by bank' has fallen to 38%, as users often prefer more descriptive labels like 'instant bank transfer'. For businesses, this highlights a critical need to use clear, action-oriented language at the checkout that is easy for consumers to understand.

By choosing to pay directly from their account, customers also gain better visibility of their financial health. Unlike card transactions that can take days to appear on a statement, an A2A payment updates the bank balance in real-time.

This helps shoppers manage their spending more effectively and prevents the ‘pending transaction’ confusion that often leads to accidental overspending. This level of transparency is a significant upgrade over making payments by card.

To get customers on board, the experience must feel familiar and safe from the very first click.

Education starts at the checkout by using recognisable terminology and clear icons rather than technical industry jargon. When a shopper sees a ‘pay by bank’ option placed alongside trusted bank logos, the perceived risk drops significantly. It is about framing the choice as a safer, faster alternative to the status quo, rather than something entirely experimental.

Encouraging the switch can be further accelerated by highlighting the speed of refunds, which remains one of the biggest pain points in online shopping. Traditional card refunds can take up to ten working days to reach a customer's account, causing frustration and unnecessary customer service queries. Because the payment path in an open banking ecosystem is direct, returning money to a customer can happen just as instantly as the initial purchase. Promoting this ‘instant refund’ feature is one of the most powerful ways to build long-term loyalty.

Success with pay by bank is ultimately about clear communication and a smooth user journey. If the ‘why’ and the ‘how’ are made obvious, customers will appreciate the efficiency, and businesses will benefit from a more profitable, streamlined checkout that drives higher conversion rates.

• Update your checkout labels: Use clear, consumer-friendly language like ‘instant bank transfer’ instead of technical terms like A2A or open banking.
• Highlight the security: Add a brief tooltip or subtext near the payment option explaining that the transaction is authorised securely within the customer's own banking app.
• Promote faster refunds: Explicitly mention on your shipping and returns page that customers using bank payments can receive refunds instantly once processed.
• Incentivise the first use: Consider offering a small discount or loyalty points for a customer's first ‘pay by bank’ transaction to break the habit of using cards.
• Optimise for mobile: Ensure the payment flow is seamless, as A2A adoption is highest among users who can jump directly from your site to their mobile banking app.