Bank of America and Banked launch "Pay by Bank

As part of the Open Banking revolution that has been transforming the banking industry in recent years, Bank of America is banking on the startup Banked, which aims to become the leader in alternative online payment methods.

FACTS

• On 14 February, Bank of America raised a total of $20 million in this UK fintech.

• Bank of America has launched its "Pay by Bank" service in the UK in collaboration with Banked.

• This new feature aims to make online shopping easier by allowing users to pay directly from their bank account (A2A: Account to Account Payment).

• Customer journey:

  • At the time of payment, the customer is redirected to their online banking platform.

  • They authenticate themselves with their login details to validate the payment.

  • Once authenticated, the payment is sent directly from the bank to the e-merchant's account.

CHALLENGES

• Avoid storing customer data: it is no longer necessary to use a bank card when making a purchase, as it is a simple "account-to-account" online payment; e-retailers do not collect their customers' card data.

• Streamline payment reconciliation: incoming payments are added to the e-merchant's receivables, so they can see everything in one place.

• Simplify, secure and cost-effective connection: The system is easy to set up by connecting to the company's existing treasury system using APIs. These connections are more secure because they use the customer's bank authentication network and less expensive because they eliminate card processing fees.

MARKET PERSPECTIVE

• The online transaction industry is growing rapidly. According to a recent study by Allied Market Research, the market is expected to reach $43 billion by 2026 in Europe alone. After the UK, Bank of America plans to roll out its Pay by Bank services to other countries and regions.