—TechRound does not recommend or endorse any financial, gambling, trading or other advice, practices or companies and operators. All articles are purely informational—
You’ve probably spotted it at checkout: a shiny new button labelled “Pay by Bank” sitting alongside your usual card payment options. Perhaps you’ve hovered over it, wondering if it’s safe, or simply stuck with what you know. You’re not alone in your confusion.
Pay by Bank is rapidly becoming one of the UK’s most talked-about payment methods, yet many consumers remain unsure about how it works. This relatively new payment option leverages open banking technology to let you pay directly from your bank account without entering card details or other information manually. Its rise has been significant, with many major industries and businesses offering it as a secure alternative, reshaping how we think about digital transactions.
But how exactly does it work, and more importantly, is it safe for everyday use?
How Pay by Bank Works in The UK
These transactions operate using the UK’s open banking infrastructure, which was established following the Second Payment Services Directive (PSD2). This regulatory framework requires banks to provide secure access to customer account information and payment initiation services for more seamless experiences.
Here’s exactly how a Pay by Bank transaction unfolds:
- Selection at checkout: You choose “Pay by Bank” from the list of options
- Bank selection: You’re presented with a list of participating UK banks to choose from
- Authentication: You log in using your mobile banking app or via online banking with a browser
- Transaction authorisation: You choose which account and check all the details are correct
- Approval: You confirm the payment using Face ID, fingerprint, or your preferred security method
- Instant completion: The payment processes immediately, and you’re returned to the merchant’s website for confirmation
One of the most important things is that the speed does not compromise security. When you authenticate a payment, you’re literally logging into your actual account using the same security measures you’d use for any other banking transaction. There are multiple layers of protection deployed, including end-to-end encryption, Strong Customer Authentication (SCA), and biometric confirmation, but the entire process typically takes less than 30 seconds.
Furthermore, your financial information is not shared. The merchant only receives confirmation that the payment has been authorised and completed; they never gain access to your account details, credentials, or other sensitive data.
However, it’s still important for the user to check whether the recipient is genuine, like when using any other payment method. Of course, this option is mostly available when using major companies which is a clear sign of credibility.
Where Can I Use Pay by Bank?
Currently, Pay by Bank UK is predominantly an online payment method. It’s not something that’s usually available at your local Tesco or Greggs, at least not yet. Instead, you’ll find it pretty much always online, either when shopping for items, booking flights, ordering food delivery, purchasing event tickets, and more.
One area where it’s been adopted heavily is the online casino industry. There are now many online casinos with the option to Pay by Bank, allowing UK players to deposit straight into their account in seconds. This has completely turned this payment’s fortunes on its head, going from a method of last resort for almost all players to one that’s embraced and used by many.
In more high-profile cases, all British customers at Ryanair, Lastminute.com, and Just Eat now have the option to pay for their flights, holidays, hotels, and meals direct from their banking account. With open banking payments already rapidly growing in the UK, it’s expected that these companies will raise the profile of paying this way even further, potentially adding millions more transactions per year and convincing more companies and industries to implement it.
Which Banks Are Participating?
Over 95% of UK current account holders are eligible to use this option. That’s thanks to Pay by Bank being supported by many participating banks including:
- Barclays
- HSBC
- Lloyds
- NatWest
- Santander
- Nationwide
- Monzo
- Starling
- Revolut
- & more
When making a payment via this method, you just need to check if your instituion is listed as one of the options. If it is, select it and you’ll be able to log in and complete the transaction. As long as you’re with one of the UK’s mainstream financial names, there’s an excellent chance you can use Pay by Bank for your transactions.
Is Pay by Bank a Standalone App?
One crucial thing to understand is that Pay by Bank is not a standalone app, so you don’t need to download anything from the App Store or Play Store to make a payment. When making a payment, the actual app you can use to facilitate the transaction is your standard online banking app.
The whole process is powered by a dedicated service, with some of the most well-known being TrueLayer and Trustly. These companies act as the technical bridge between merchants and banks, facilitating secure payment initiation services. They’re regulated by the Financial Conduct Authority and must meet strict security and operational standards.
The Future: Ubiquitous Payments by Bank
The UK has ambitious plans for upcoming adoption. The government published its National Payments Vision in November 2024, positioning open banking payments as a cornerstone of the UK’s digital payment future.
The strategy aims to make Pay by Bank ubiquitous moving forward, with UK residents being able to use it for all types of payments; from utility bills and subscriptions to more seamless online checkouts and even in-store payments.
Industry projections suggest that open banking could account for a significant portion of UK transactions over the next few years, particularly as younger consumers embrace its speed and security benefits. The combination of regulatory support, merchant cost savings, and consumer convenience creates a compelling case for widespread adoption.
—TechRound does not recommend or endorse any financial, gambling, trading or other advice, practices or companies and operators. All articles are purely informational—
