The curtain has closed on the 2024 Summer Games in Paris, showcasing remarkable, record-breaking moments from athletes from around the world. In the sporting arena, where victory and defeat are often separated by mere seconds – or even hundredths of a second – the same could be said about the world of payments today.
Multiple payment solutions are competing for the top spot in the checkout. While cards have long held the lead, in an increasingly digitised economy, they face increasing competition from alternatives such as Pay by Bank. As consumer payment preferences adapt, shaped by advancements in technology and changing habits, it’s clear that the landscape is rapidly shifting.
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Who’s leading the Pay by Bank race?
Recent reports show online payment methods are evolving, with Pay by Bank emerging as an increasingly popular option based on the factors consumers are prioritising at checkout. Specifically, the increased levels of security and ease of use. Now, a new wave of Pay by Bank solutions (also known as account-to-account or A2A payments) powered by open banking is driving this shift even further. These modern payment rails can offer secure, convenient, and instant payments, which is what both consumers and businesses want.
As the ‘summer of sport’ has highlighted, some countries are outpacing others. When it comes to familiarity and usage of Pay by Bank, significant differences emerge. For instance, recent survey data reveals that 92% of respondents in Spain and 90% in the UK are familiar with Pay by Bank, yet neither can surpass the Netherlands, where an impressive 97% have at least some familiarity with the method. In Germany, two-thirds (67%) of survey respondents are familiar with Pay by Bank, while in France, only 28% have heard of it.
In terms of frequency of Pay by Bank usage, the Netherlands also leads, with 84% using it at least monthly. Spain surpasses the UK in daily, weekly, and monthly online usage of Pay by Bank, while Germany has slightly fewer daily users than the UK. France is out of medal contention here too, with 7 in 10 respondents having never used Pay by Bank.
The recent Instant Economy Payment Insights report shows that Pay by Bank is most popular among young adults aged 18-29. In Spain, 59% of this age group use the method daily or weekly, while in Germany, around 25% do the same. Interestingly, the Netherlands stands out as the only market where the 30-39 age group (72%) uses Pay by Bank more frequently than the 18-29 group (65%) for daily or weekly purchases.
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By GlobalDataThe Pay by Bank surge – what’s driving It?
Just like on the unique lavender track at the Stade de France, speed is a vital component of what makes an online payment method successful. This is one of the reasons behind the emergence of Pay by Bank. It’s a hassle-free payment method that uses readily available information instead of requiring card details, with transactions instantly reflected in the user’s bank account.
Speed is especially important to Gen Z (18-29 year-olds). Research reveals that 39% of this age group rank it as a top priority when choosing an online payment method, some 5% higher than other age groups.
While the need for speed is clear, security remains a crucial consideration for consumers when choosing an online payment method, with its importance increasing with age. Among Gen Z users, 51% rank security as a top-three concern. However, for those aged 60 and above, security takes the gold, with 71% placing it on the podium. Cost or fees and user convenience round out the medal positions, with 82% and 80% of users considering them either very important or important.
Crossing the finish line
Pay by Bank is rapidly gaining momentum as a payment option that meets the needs of today’s consumers. Research shows that younger demographics are increasingly familiar with this method and understand the benefits of reporting positive experiences. It’s easy to see why: Pay by Bank simplifies transactions, offering convenience, speed, and the security consumers expect. As awareness grows, Pay by Bank is set to become a significant player in digital payments.
Lena Hackelöer is founder & CEO of Brite Payments
