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  • Payment
  • Players’ Strategy
  • Europe

Barclays Rolls out Pay by Bank for Customer Merchants

Photo credits: Mastercard


  • The British institution is rolling out Pay by Bank for merchants. With this near real-time option their customers will be able to rely on Faster Payments to pay for their purchases online, using their m-banking app.
  • Goal: Boost the Pay by Bank app, increase its use rates.
  • As the leading issuing and acquiring institution in the UK, Barclays may contribute to boosting Pay by Bank’s adoption among individual and corporate consumers. For merchants, featuring a wide range of payment methods is key to enhancing their value proposition.
  • Benefits:
    • Lower costs for merchants: no interchange fee applied
    • Improved security for customers: no banking data shared with merchants
    • Lower fraud rates for merchants: at checkout, the authentication process relies on his m-banking app
    • Better budget management for the users: real-time visibility prior and after the payment is made
  • Barclays also announced they would make Pay by Bank available to all their Barclays Mobile Banking users (+6 million customers) by 2020.


  • Slow take-off. Pay by Bank was launched in 2016 and, until recently, was only available via Barclays’s Pingit e-wallet. Mastercard hopes that this expanded partnership will help their VocaLink-operated payment service gain ground.
  • An alternative to OTP SMSs. This widespread authentication service among PSPs is being reconsidered by the EBA. For the sake of regulatory compliance, banks could then opt for biometric mechanisms or authentication methods based on m-banking apps, such as Pay by Bank.


  • This agreement with Barclays is in line with Mastercard’s recent moves to improve their payment solution’s visibility among first-level merchants. Partnerships have also been announced with Worldpay and HSBC.
  • Mastercard reaches out for a market led by Visa (97% of all debit card in the UK). And Visa soon came up with a response to Pay by Bank: their “real-time” payment platform Visa Direct.
  • In the meantime, Mastercard is further gaining momentum in the US, even if instant payment services are not yet standard on this market. This month, MetaBank unveiled a Faster Payments-based, near real-time payment platform featuring Mastercard Send.