Pay by bank is starting to appear in places where UK customers already shop and pay. That shift matters because familiarity often decides whether a payment method feels useful or strange.
The journey is simple in principle. A customer selects Pay by Bank, chooses their bank and approves the payment inside their banking app or online banking service.
There is no card number to type. There is no need to copy bank details from an invoice. The payment can carry the correct amount and reference from the start.
That makes pay by bank more than another name for bank transfer.
Why Pay by Bank is gaining attention
Open banking payments grew strongly during 2025. The Financial Conduct Authority reported more than 16 million active users and 53% year on year growth in open banking payments.
Open Banking Limited reported 351 million open banking payments across 2025.
The payment option has also moved into more familiar customer settings.
HM Revenue and Customs already lets people pay certain taxes directly from their bank account. Open Banking Limited reported in February 2026 that Amazon and eBay had introduced Pay by Bank options in the UK.
These examples matter because customer behaviour changes through repetition.
A new payment method feels risky when people only see it on an unknown website. It feels different when the same basic journey appears in tax payments, large retail platforms and everyday financial services.
Mainstream adoption does not happen overnight. However, repeated exposure can make the process easier to recognise.
Pay by Bank can remove manual steps
Consider an ordinary bank transfer.
A business sends an account number and sort code. The customer opens their bank. They create or select a payee. They enter the amount. They remember the reference. Then the business checks the account and tries to match the payment.
That process works. Millions of people use it.
The problem is that it creates room for mistakes and manual work.
Pay by bank can remove several of those steps. The payment request can carry the amount and reference. The customer can approve the transaction without manually rebuilding it inside the banking app.
For businesses that already prefer direct bank payments, that can make the experience feel more professional.
It can also help reconciliation because the payment starts with more structured information.
Where businesses are already using Pay by Bank
Open Banking Limited has published several case studies showing where bank authorised payments have been used.
Cazoo added an open banking option for high value vehicle purchases. The case study described card limits and settlement friction as part of the problem. It later estimated that around one in four buyers used the open banking option.
JustGiving introduced open banking as an additional payment choice. Its case study reported that open banking represented around 7% to 8% of payment share at the time. It also reported lower payment costs and a higher average transaction value for those payments.
A digital marketing agency called Childsey used a Pay by Bank service connected with Xero. The goal was practical. It wanted to reduce time spent chasing invoices and matching payments.
These examples are different, but the pattern is similar.
The payment method becomes useful when it solves a specific problem.
It does not need to replace cards everywhere.
It only needs to earn its place.
What Pay by Bank could mean for independent businesses
Independent businesses often operate across several channels.
A customer may discover a business on Instagram. They may ask a question on WhatsApp. The business may send a quote by email. The work may happen in the customer home. Payment may come later through an invoice.
The traditional website checkout is only one part of that journey.
Pay by Bank can fit into links, invoices and other digital payment requests. That creates opportunities for businesses that do not always sell through a conventional online shop.
- A tradesperson could send a payment request after completing a job.
- A consultant could place a direct payment option on an invoice.
- A market trader could use a QR code that opens a payment journey.
- A service business could send the same payment route through email or a message.
The business still needs to consider trust, refunds, customer support and regulatory responsibilities. However, the payment can begin where the customer already is.
Cost is only one part of the decision
Pay by Bank is often discussed as an alternative to card processing costs.
That is important, but businesses should not look at price alone.
- A cheaper payment method can still be expensive if customers abandon it.
- A fast settlement can still create problems if reconciliation is poor.
- A simple link can still damage trust if the customer does not understand where it leads.
Businesses should compare the whole journey.
Look at payment fees, settlement speed, confirmation, refunds, fraud controls, reconciliation and customer familiarity.
The right answer may involve more than one payment method.
A customer buying a low value item may prefer a wallet. Another paying a large invoice may prefer direct bank payment. Someone else may still choose a card.
The business needs a payment experience that can handle that choice without becoming fragmented.
Why Paycilo is exploring this shift
Paycilo is being developed as a proof of concept around a simple question.
Can a business keep one consistent payment identity while the payment methods underneath it continue to change.
Pay by Bank is one important part of that question because adoption is growing and the customer journey is becoming more familiar.
However, Paycilo is still early.
We are not assuming that every business wants open banking. We are speaking with operators about how they get paid today and where direct payment would genuinely improve the experience.
The future of checkout may not belong to one payment rail.
It may belong to businesses that can offer the right rail without losing the consistency of their own identity.
