Imagine a world where paying for your coffee or booking a hotel is as simple as tapping your bank app – no more fumbling for cards or worrying about fees. That's the exciting reality of Pay by Bank, and it's not just buzz anymore; it's hitting the mainstream. But here's where it gets controversial: is this shift empowering consumers, or could it leave traditional players scrambling? Dive in as we unpack how account-to-account payments are reshaping finance in the UK and Europe, and discover the insights that might just change how you think about your wallet.
In a keynote address at the Open Banking Expo UK & Europe on October 21-22, Todd Clyde, CEO of Token.io, shared his perspective on how account-to-account (A2A) payments – that's when money moves directly between bank accounts, bypassing cards or intermediaries – have evolved. He declared they've transitioned from "early market hype" into a standard, everyday option for consumers and businesses across the UK and Europe. This isn't just talk; Clyde backed it up with data from the Token.io and Open Banking Expo's Pay by Bank Signals & Trends 2025 survey (check it out here: https://www.openbankingexpo.com/news/pay-by-bank-now-table-stakes-for-banks-and-psps-as-merchant-demand-surges/). An impressive 91% of survey participants noticed a sharp uptick in merchant interest this year, and they expect that trend to keep growing.
Now, you might be wondering, 'Why the fuss? Merchants love it because it's cheaper, right?' But here's the part most people miss: the real push comes from us consumers. Our preferences are shifting – we're choosing payment methods that feel more secure and straightforward, like direct bank transfers. This pressure compels merchants to adapt, broadening their horizons to accept Pay by Bank to capture more customers and boost sales. It's like how streaming services had to offer more choices to keep viewers; similarly, businesses are expanding payment options to stay relevant.
And this is where it gets intriguing – payment service providers (PSPs), those middlemen handling transactions, are feeling the heat. A whopping 95% now view Pay by Bank as crucial for their strategy over the next two to three years, a massive shift from previous years. Clyde explained that this change stems from two forces: merchants banging down doors demanding it, and fierce competition. If PSPs don't step up, they risk losing customers to specialized A2A providers. Think of it as the classic tale of evolution in tech – adapt or get left behind. For beginners, PSPs are like the facilitators of online payments, ensuring smooth transfers between parties.
On the banking front, the survey reveals that 67% of banks are either already rolling out Pay by Bank or planning to soon. During his main stage talk, Clyde elaborated that some financial institutions see this as a golden opportunity to attract small and medium-sized enterprises (SMEs) with new revenue streams and stronger customer loyalty – imagine a bank offering seamless payments that keep businesses coming back. Others are using it to revamp customer interactions, making everything more modern and user-friendly, like upgrading from a clunky old phone to a sleek smartphone.
Adding to the excitement, Clyde was joined by Rachelle Alexis Lim, general manager at Antom EMEA (Ant International's payments division), to unveil a fresh partnership with Token.io. Lim expressed genuine enthusiasm, stating that this collaboration is pivotal for driving A2A adoption in the UK and Europe. For Antom, it's about teaming up with local experts like Token.io to create tailored, strong ecosystems for merchants. This way, businesses can confidently enter markets and connect with trusted local customers. By linking into Token.io's top-notch infrastructure, Antom ensures smooth integration with Open Banking systems – those secure, regulated pathways that let different apps access your banking data safely.
Jess Gerrow, Token.io's VP of Marketing, echoed the sentiment, calling this year a pivotal moment. The buzz at the Expo, she noted, underscored that Pay by Bank's growth is unstoppable. "The enthusiasm across the Expo floor and stages made it clearer than ever: Pay by Bank’s momentum is undeniable."
Vive le Pay by Bank!
The spotlight stayed on Pay by Bank during a cozy Fireside Chat on The Payments Show Stage, featuring Matt Jackson, Token.io's VP of Partner Manager, and Lirka Bibezic, BNP Paribas' global head of product management for receivables and cash management. They delved into BNP Paribas' "innovation journey" with Instanea, an Open Banking-powered product built on Token.io's tech. Bibezic outlined key reasons for launching Instanea: clients craved instant, direct bank account payments; higher limits than credit cards to boost sales; easier matching of payments to invoices (simplifying accounting); and, of course, cost savings. It's like choosing a faster, cheaper lane on a highway that also avoids tolls.
They explored real-world applications, from utilities and travel to retail and high-end fashion. Jackson praised the "variety of use cases" as truly engaging, noting how Instanea is transforming multiple merchant sectors. For instance, a fashion boutique could offer instant payments for luxury items, reducing fraud risks and speeding up settlements.
VRP’s Path to Ubiquity
Shifting gears, a lively Powerhouse Debate on the main stage tackled how close the UK is to fully embracing variable recurring payments (VRPs) – think automated, flexible subscriptions for bills or services. Token.io's Chief Product Officer, Charles Damen, moderated with experts: Andrew Self from the Financial Conduct Authority (FCA), Isabel Pitt from Nationwide Building Society, and Nick Soulsby from Virgin Money. They debated if incentives for banks, fintechs, and merchants align for commercial VRPs (cVRPs) to succeed, and what consumers truly desire.
Damen highlighted that VRPs for sweeping (like auto-saving) are already in use, laying a solid base for broader commercial rollout. Soulsby shared that Virgin Money's credit card holders now use Open Banking for 96.2% of single payments monthly. He believes familiarity breeds trust – once customers try it with one provider, they'll adopt it elsewhere, making it more widespread and reliable.
Pitt from Nationwide added excitement about streamlining journeys, making VRPs less cumbersome and more daily-use friendly. But she stressed trust and control: educating users on when, why, and how to use them, plus protections. Think of it as teaching someone to ride a bike – safety first, then freedom.
On what's needed for scale, Damen emphasized reach: widespread bank involvement is essential for VRPs to go everywhere. Without it, adoption stalls.
Further reading: Pay by Bank now ‘table stakes’ for banks and PSPs as merchant demand surges (https://www.openbankingexpo.com/news/pay-by-bank-now-table-stakes-for-banks-and-psps-as-merchant-demand-surges/)
What do you think? Is Pay by Bank the future of payments, or will banks resist change? Do you worry about security with direct bank transfers? Share your thoughts below – agree, disagree, or add your own take. And here's a controversial twist: some say this could democratize finance by cutting out middlemen, but others fear it might disadvantage smaller players. What's your stance? Let's discuss!
