Predictions for Pay by Bank: How it will redefine payments in 2025

Remember the excitement of Blockbuster on a Friday night? For countless movie lovers, it was the ultimate weekly ritual: weaving up and down the aisles filled with colorful movie covers, checking behind them to see if THE one was up for grabs, and making your way to the counter where all of the candy, soda, and snacks were.

Then Netflix entered the chat.

From Blockbuster’s peak in 2004 to the dominance of Netflix streaming in 2009, five years made a huge difference. Just one year later, in 2010, Blockbuster would file for bankruptcy.

Netflix and Blockbuster were polarized in their value propositions in some key areas: 1) ease of navigation, 2) convenience, and 3) freedom from late fees.

This shift in consumer behavior is a powerful lesson for merchants. Consumers don’t just buy products—they buy ease, convenience, and savings. If it’s simple and budget-friendly, then loyalty follows. That’s why our beloved Blockbuster is now a trip down memory lane. 

Pay by Bank, a payment method that allows consumers to make faster ACH payments directly from their bank accounts, has the potential to disrupt payments in 2025 the same way Netflix disrupted the way we rented movies. 

In this article, we’ll cover the consumer & merchant landscape and emerging trends for 2025.

Key Takeaways 

• In 2025, Pay by Bank will be the preferred payment method.
• Merchants must make Pay by Bank an enticing and valuable option—incentive simplicity, savings, and a better experience.  
• Interest in Pay by Bank is rising as retail giants offer better incentives than credit and debit cards, increasing in-house loyalty. 
• Interchange rates will increase. On average, a merchant can expect to pay between 1.15% and 3.15%, costing merchants thousands of dollars.

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Pay by Bank in 2025 for consumers & merchants

“[In 2025] Pay by Bank will be seen as the way to achieve lowest cost payment acceptance for merchants.” – Alex Gonthier, Trustly’s Founder and CEO.

As interchange fees climb and cash usage declines, Pay by Bank emerges as a compelling solution for merchants seeking to optimize ACH payment processing in 2025. And for good reason: Pay by Bank offers lower transaction fees, increased approval rates, faster & more secure settlements, and valuable insights into consumer spending. It’s the better choice for businesses looking to stay ahead of the curve.

While benefits are clear to merchants, the challenge is getting consumers to adapt next year. 

Why consumers are ready to choose Pay by Bank in 2025

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“I believe Pay by Bank will see a sharp increase in user adoption as well as conversion next year as more consumers than ever have linked their bank account at some point in their online financial journey (for payments, loan applications, bank applications, etc.).” – Christina Potter, Trustly’s Head of eCommerce.  

As stated earlier, consumers are moving away from cash. While the preferred method is to pay with credit cards, it isn’t guaranteed and doesn't always provide the best benefits. Merchant restrictions, additional processing fees, or the simple fact that some merchants don't accept credit cards can limit its appeal.

It’s not much better for debit card users. They may face more limitations, such as bank-imposed limits (leading to declines in everyday spending such as gas, groceries, restaurants, etc.). Also, merchants typically incur high processing fees that are then passed on to the consumer to absorb, especially for bill payments. 

Wire transfers aren’t as popular as credit or debit, but are still used. They are slow and incur extra bank fees, making them a less convenient choice for fast, time-sensitive payments. 

A2A payments (bank-to-bank transfers) are gaining traction. They offer cheaper transaction fees and quicker payment settlements. Pay by Bank is only going to ignite that increase as the ease of account linking & setup makes it simple to make A2A payments. 

Pay by Bank: A smarter strategy for customer retention and business

Blockbuster and Netflix have shown that consumers are loyal until they see something better. 

As Ross McFerrin, Trustly’s VP of Enterprise Growth, points out:

‍“2025 will be the break-out year for Pay by Bank. Merchants will introduce interesting ways to drive adoption, and consumers will gladly take advantage of the benefits brought to them!” 

A PYMNTS Intelligence and Trustly, Inc. collaborative report revealed that consumers who receive incentives like cash-back discounts or loyalty perks increase their interest in using Pay by Bank by 72%, pushing aside their beloved credit and debit cards. 

Take a leading telecom giant. They successfully made ACH the preferred payment method for customers by focusing on one thing: the customer experience.

By leveraging Trustly, this Fortune 50 telco significantly saved on payment processing fees. Now, the company passes those savings on to customers by incentivizing a monthly discount for those enrolled in autopay (APO) using Pay by Bank. 

The result? They eliminated $60 million in interchange fees, and now 65% of customers are signed up for autopay.

It’s a win-win.

Additional Pay by Bank trends to watch for in 2025

Increasing interchange rates push retail giants toward Pay by Bank

It’s not just the interchange rate that is costly. Merchants pay between 4%-10% of their revenue for interchange rates, chargebacks, false positives, and fraud loss. The cost adds up quickly, which is why retail giants are exploring Pay by Bank.     

“I think consumers will see Pay by Bank at major retailers and e-commerce platforms for Black Friday and Cyber Monday 2025. Walmart's announcement about using Pay by Bank feels like the tip of the iceberg. There's a lot of interest from retailers — some of whom are working with Trustly on some very cool things. It'll be exciting to see them come to life over the next few years.” – Matt Janiga, Trustly’s Director of Regulatory and Public Affairs.

Next year, Walmart announced that it will roll out Pay by Bank, offering real-time payment options online through FedNow and RTPs. The driving force is to reduce consumers’ dependence on credit and debit cards, which charge between 2% to 5% to process. 

Target launched the Target Circle Card (a form of Pay by Bank), which rewards Target shoppers with 5% off purchases plus additional incentives.

These major retailers are paving the way for more merchants to adopt Pay by Bank methods in 2025.

Pay by Bank gives merchants insight into consumer spending in real time 

“Enhanced data products through Trustly Insights [will] arm merchants for better player management including responsible gaming initiatives.” – John Parsons, Trustly’s VP of Gaming.

Pay by Bank is more than just payments. With Trustly Insights, merchants can track consumer spending to identify fraud and refine marketing strategies in 2025, enabling secure payments and personalized experiences.

For instance, knowing when a customer typically makes a grocery purchase or fills up their car allows retailers to send tailored promotions or loyalty offers. 

This level of personalization increases the likelihood of adoption and conversion while fostering deeper relationships with consumers, which will be essential to winning (and keeping) consumers in the future.

Cash is no longer king as consumers (and many merchants) go cashless

Next year, cash usage is expected to decline by 40%. As mentioned earlier, A2A and real time payment options will be preferred. And our Trustly team agrees as they foresee:

“Request for Payment will become an expected component to the offering.” – Ross McFerrin, Trustly’s VP of Enterprise Growth 

“I think in 2025, the retail sector will finally see the value and NEED to offer Pay by Bank to their consumers to stay ahead of the curve/on par with other retail trailblazers. If not, they will fall behind in the market both in consumer payment demands and increased payments driven P&L losses.” – Christina Potter, Trustly’s Head of eCommerce.  

“Pay by Bank will continue to gain momentum, [as] physical casinos deploy, and players adopt based on the convenience of not having to a) carry cash or b) go to [and] wait in line at in-casino ATMs and pay withdrawal fees to get cash.” – Alex Gonthier, Trustly’s Founder and CEO. 

Merchants will experiment with guaranteed ACH payments

"Breakout year for the US with lots of retailer experiments following Walmart’s RTP announcement and 1033 regulation” – Adam D’Arcy, Trustly’s Chief Product Officer. 

ACH payments are risky for retailers and eCommerce platforms. To navigate these risks, merchants either need a top-notch in-house payment and risk team (which are costly) or a reliable partner that guarantees ACH transactions, such as Trustly.

Final thoughts

“U.S. pay-by-bank volumes will top $100 Billion in 2025, powered by growth in existing pay-by-bank merchants, growth from new providers entering the market, and large retailers adopting pay-by-bank,” predicts Matt Janiga, Trustly’s Director of Regulatory and Public Affairs.

Just as Netflix reshaped movie rentals, Pay by Bank is set to revolutionize payments in 2025. With Pay by Bank, merchants can save on payment processing costs while offering consumers faster, simpler, and more secure and cost-effective options. 

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Trustly is the global leader in Pay by Bank. Learn how we're doing it.

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