- Due to its immediacy and low costs, the adoption rate of the Pay by Bank system is growing.
In recent years, the immediate bank transfer payment method has gained relevance in some European nations. In Latin America, the development of platforms facilitating the adoption of this payment method has been observed, proving to be valuable allies for e-commerce businesses and physical stores across various categories.
Advantages of the Pay-by-Bank System as a Payment Method
- Reduction in commissions
By eliminating intermediaries and the need for point-of-sale terminals (POS), commissions associated with payments decrease by up to 75%.
- Increased payment security
The risk of receiving counterfeit bills or stolen/cloned credit/debit cards is eliminated. - Lower fraud rates
To process a transaction, the customer must approve it through the banking app, entering their password and phone password. - Immediate liquidity
Money is reflected in the bank account within seconds, reducing waiting times by more than 95% compared to POS and other forms of payment.
Global Trend
Compared to other parts of the world, the United States has lagged in the adoption of “Pay by Bank.”
However, in 2024, this payment method is set to experience accelerated growth driven by the convergence of several trends:
The growing availability of real-time payment channels
Keys:
- Increased interest from businesses in avoiding card processing fees
- The need for faster access to funds
American consumers exhibit a notable attachment to card usage, representing over two-thirds of the value of point-of-sale transactions and half of e-commerce spending, according to the FIS/Worldpay 2023 Global Payments Report.
In 2022, this payment method accounted for 9% of online payments in the United States, and 8% in 2021. With the launch of the Federal Reserve’s instant payment service FedNow, it is forecasted that this form of payment will experience a compound annual growth rate of 14% until 2026.
In Europe, the same report shows that Pay by Bank represented 18% of e-commerce transactions in 2022.
There are four key financial consumer actions where a preference for this payment method is expressed:
- Consumers tend to prefer cards for e-commerce purchases but use Pay by Bank more for recurring household bills.
- Also, for transferring money to another person, investing, or purchasing a high-value item. Among these innovative platforms is ETpay, which commenced operations in 2019 in Chile and expanded to Mexico just a year later.
- It offers a payment solution based on immediate bank transfers, providing opportunities to diversify payment options for small, medium, and large enterprises.