Defining Pay by Bank and Open Banking Payments with Trustly

Pay by Bank describes a wide range of payment methods, from traditional paper checks to modern instant payment networks. But what does Pay by Bank mean when we say it, and what does that mean for you?

“Pay by Bank is a term that is too general. Generic essentially. What we really mean is Open Banking-based or -enabled payments over bank rails.” - Alex Gonthier, Trustly, Inc.’s Founder and CEO, offers a clear and insightful perspective.

What is Pay by Bank?

To keep it simple, Pay by Bank refers to any payment method that enables the transfer of funds directly between bank accounts. This universal definition encompasses a variety of options, including:

• Traditional methods: Paper checks, wire transfers
• Modern solutions: Zelle, FedNow, The Clearing House's RTP network, ACH

Beyond this broad definition, there's a deeper layer to Pay by Bank that unlocks its true potential. Trustly's approach leverages Open Banking technology to redefine what's possible with bank-based payments.

Trustly's approach to Pay by Bank through Open Banking Enabled Payments

Trustly focuses on Open Banking-enabled payments over bank rails, also known as Open Banking Payments. This distinction highlights the key role of Open Banking technology in facilitating secure, efficient, and user-friendly bank-based payments for consumers and merchants.

Three key advantages of Trustly's Pay by Bank solution

1. Simplified User Experience (UX): Leveraging Open Banking eliminates the need for consumers to remember or manually enter their bank account and routing numbers. This simplifies the checkout process, reduces errors, and improves the user experience. Imagine the ease of checking out online by simply signing into your familiar online banking portal–that's the advantage of Trustly’s Pay by Bank solution.
   
2. Strong Authentication: Security is a critical component of payments. Pay by Bank solutions tap into the robust authentication protocols of online banking systems, providing a strong defense against fraud. This enhanced security protects consumers and merchants, fostering trust and confidence in the payment process.
3. Trustly’s Split-Token technology: Our patented technology provides an extra layer of security for Open Banking payments, safeguarding consumer credentials and preventing fraud. Sensitive information is never stored, eliminating the risk of data breaches and unauthorized access.

This means that consumer credentials would remain safe and secure even if Trustly's systems were compromised. This provides peace of mind for merchants and consumers, fostering trust and confidence in the payment process.

The broader impact of Pay by Bank

Pay by Bank offers more than a streamlined checkout experience and enhanced security. It also has the potential to:

• Increase financial inclusion: By providing an alternative to traditional credit cards, Pay by Bank can empower consumers who may not have access to credit or prefer to avoid accumulating debt.
• Reduce costs for merchants: Pay by Bank transactions often have lower processing fees than card payments. Merchants can then take these savings and pass them on to consumers in the form of incentives or loyalty perks.  
• Improve cash flow: Instant settlement of Pay by Bank transactions can improve businesses' cash flow, enabling them to access funds more quickly.
• Smarter payments: Data enriches each transaction, giving merchants insights into their consumers. This information can be used to create tailored offers or develop new products. 

Trustly's commitment to Pay By Bank

By leveraging Open Banking technology, Trustly is committed to delivering Pay by Bank solutions prioritizing security, convenience, and user experience. As the payments landscape continues to evolve, Trustly is poised to play a leading role in shaping the future of Pay by Bank and driving its widespread adoption.

To learn more, connect with our team of experts.