Pay by Bank : what is it ?
Pay by Bank is a payment method that allows you to pay for a purchase directly from your bank account, without using a bank card or digital wallet. This payment solution relies on secure, real-time money transfer systems between accounts.
Pay by Bank : how it works
The Pay by Bank payment system works as follows :
- Initiation of payment : the customer chooses the Pay by Bank option when ordering, indicating that they wish to pay directly from their bank account.
- Bank selection : the customer selects their bank from the available options for payment processing.
- Authentication via the banking app : If the payment is made from a mobile device, the customer’s banking app opens automatically. The customer must then log in and verify their identity using a PIN or biometric data (Touch ID or Face ID). If the purchase is made on a desktop computer, they must scan a QR code which redirects them to their banking app.
- Payment confirmation : a transfer screen is displayed, pre-filled with the beneficiary’s IBAN, amount, reference… The customer confirms the transaction.
- Funds transfer : The customer’s bank processes the transfer and transfers the funds directly to the merchant’s account
This process guarantees a fast, secure transaction without the need to enter bank details.
Pay By Bank : a payment method regulated by PSD2
The Payment Services Directive (PSD2) enabled the creation of Pay By Bank through Open Banking. This obligation requires financial institutions to grant access to their payment services and customer data (with consent) to other providers.
This open access approach has fostered the emergence of new payment initiation services (PIS). Through secure APIs, third-party providers can connect to bank accounts and initiate payments directly from the customer’s account, without any additional intermediaries.
What are the advantages of Pay by Bank for businesses ?
As a professional, you need to offer payment methods tailored to your customers while optimizing your costs. Choosing efficient solutions improves the payment experience and minimizes transaction fees.
Reduction in transaction costs
Pay by Bank significantly reduces payment fees. By eliminating intermediaries associated with bank cards, commissions are often lower for merchants.
This payment method allows you to :
- To reduce transaction processing fees
- To avoid commissions linked to card networks
- To better control costs on high payment volumes
Transaction security
Pay by Bank allows customers to validate their purchases directly with their bank, thus reducing the risk of phishing and fraud. Authentication enhances security by combining multiple verification levels. This approach fully meets the requirements of PSD2 for strong customer authentication (SCA).
Increased risk of chargeback
Pay By Bank is a guaranteed payment method, with no risk of chargebacks. The transaction is final, as confirmed by the customer. There is no risk of disputes related to chargebacks.
Guaranteed customer solvency
Direct payment from the bank account, Pay by Bank, allows for reliable credit checks. The bank verifies the availability of funds before any authorization. This ensures the company that the customer is creditworthy, significantly reducing the risk of non-payment.
Instant reconciliation
With Centralpay, the Pay by Bank solution enables immediate payment matching. Each payment link includes a dedicated virtual IBAN and/or order references. As soon as the customer pays, the payment is automatically associated with the correct transaction.
This reduces billing errors and simplifies accounting follow-up, without manual intervention.
Pay By Bank with CentralPay
Offer Pay by Bank to your customers with CentralPay. The bank transfer payment option simplifies payment collection : the payment is initiated directly from the customer’s bank account, with the amount and order details already included. The customer authenticates and confirms the transaction from their banking app. The payment is then automatically reconciled with the order for optimized accounting.
