Pay-by-Bank Gains Ground but Cards Retain Habit Advantage

Pay-by-Bank uses open-banking connections and real-time payment rails to move money directly from a consumer’s account to a merchant, bypassing traditional card networks. ACI Worldwide sees it as the most successful alternative to cards so far, with lower merchant costs and immediate settlement strengthening its appeal. Yet cards retain a formidable advantage: decades of broad acceptance, familiar checkout behavior and mature rules for fraud, refunds and chargebacks, making consumer habit as important as payment technology.

ACI Worldwide payments specialist Dean Wallace said banks should not equate a better Pay-by-Bank experience with eliminating every step. Authentication must create enough friction to reassure users without making checkout cumbersome or inconsistent across institutions. ACI launched ACI Instant Pay on Jan. 17, 2023, saying card-processing costs averaged 2% to 4% of transaction value. The competitive test is whether banks can pair security and clear protections with card-like convenience; failure to strike that balance risks abandonment and weaker customer loyalty.