Open banking payments are growing fast, yet most shoppers still reach for a card. Two industry voices explain what stops them, and provider data shows which checkout changes lift conversion.

Pay by bank should be an easy sell. Merchants pay less than they do on cards, and shoppers approve each payment in their own banking app. Even so, most people still tap a saved card. Pay by bank adoption is rising in the UK, but it remains far from the default at most checkouts.

So we asked industry leaders one question: what has stopped customers using pay by bank at checkout, and what made the biggest difference to adoption for your business? We welcomed conversion figures and before-and-after results. Two respondents answered. Below, we set their replies against the latest data on pay by bank adoption in the UK, the US and Europe.

Pay by bank adoption in numbers

Volumes are growing quickly. UK open banking payments passed 40 million a month for the first time in May 2026, and the total passed one billion in June, according to Open Banking Expo. In addition, commercial variable recurring payments went live on 2 June 2026.

Awareness, however, has moved the other way, and that gap now limits pay by bank adoption. Only 38% of UK adults recognise the term “pay by bank”, down from 55% a year earlier, Open Banking Expo reported from a Yaspa and YouGov survey. Meanwhile, US use is thinner still. Pay by bank makes up just 1.5% of US consumer transactions, according to PYMNTS Intelligence and Trustly. For the basics, see our explainers on what pay by bank is and how open banking works.

Friction at the moment of payment

Our first respondent runs an AI video platform and has tested alternative payment methods at its own checkout.

“The biggest thing holding back pay by bank is friction at the moment people decide to pay. Most of us run on habit. There’s a card saved in the browser, and anything that adds even one extra step feels like a cost. In my view, that small bit of extra effort matters more than anything else.

At Magic Hour, the change that helped most was closing the education gap at checkout. When we first offered alternative payment methods, people stalled because they didn’t understand the flow, and they went back to their card. Non-card methods converted noticeably worse, sometimes 15 to 20% below saved card checkout.

What worked was making the option feel like the obvious next step. We stopped hiding it in a dropdown and started showing it in context, with the benefit spelled out right when people were ready to pay. When shoppers see a clear reason, they stop hesitating.

Any payment method lives or dies on one question: is this less work than what I already do? Apple Pay won by being one thumb press, and pay by bank needs to get that easy. So treat it as a UX problem, not a box to tick on your integrations page.”

Runbo Li, Co-founder and CEO, Magic Hour

His point on habit holds up, but trust matters too. The PYMNTS and Trustly research found nearly half of US consumers who reject pay by bank think sharing bank credentials is less safe than using a card. Similarly, UK SMEs name fraud and security fears as their top barrier, ahead of low customer demand. Note that Magic Hour’s own checkout offers European bank redirects such as iDEAL, not UK or US pay by bank. So his figures describe non-card methods in general, rather than pay by bank adoption specifically. Even so, his advice on placement matches what providers report.

The redirect is where shoppers drop out

Our second respondent focused on the moment a shopper leaves the merchant’s site.

“The main barrier is the jolt of being sent from a familiar checkout into a banking app or portal. People are used to one-click wallets. When a bank payment suddenly asks them to log in and authenticate outside the shop, some see it as a phishing risk or an error, and they abandon the basket.

Adoption improves when merchants explain the option inside the checkout, rather than listing it next to every other method. Short, clear copy on the benefits, such as instant confirmation, helps before the shopper clicks. Mobile deep-linking matters a lot too. If the hand-off to the banking app isn’t instant, or the shopper has to search for their bank by hand, many will drop out whatever the technology underneath.

It also helps to present pay by bank as something that protects the customer, not just a way for the merchant to save on fees. A clear visual guide to the approval step, with consistent branding throughout, sets expectations and builds trust.”

Amit Agrawal, Founder and COO, Developers.dev

The redirect point matches industry guidance. Open Banking’s own standards recommend app-to-app redirection, so the shopper lands straight in their banking app. Providers now also remember a returning shopper’s bank, which removes the search step. Token.io, for example, launched an account-on-file feature to make repeat payments a single tap. Still, the security framing needs care. Pay by bank has no card chargebacks and no Section 75 cover. A Which? investigation found few shoppers understand that gap.

What lifts pay by bank adoption

Provider data points to four levers for pay by bank adoption. First, returning users convert far better. TrueLayer says shoppers who have used pay by bank before convert 22% higher than first-timers. Second, placement matters. Token.io and ACI Worldwide report gains of up to 79% for some merchants that put pay by bank front and centre and added QR codes.

Third, incentives work. Gift card app JamDoughnut offered double cashback on bank payments and saw 90% conversion, TrueLayer reported. Finally, a simple banner helps. One TrueLayer merchant saw a 10% uplift after recommending pay by bank in its app. However, all of these figures come from providers, not independent audits. Merchants should test each lever on their own traffic before relying on it, because pay by bank adoption varies widely by sector and basket size.

What still holds shoppers back

Several gaps still slow pay by bank adoption. There is no single scheme brand, so shoppers meet different names at each checkout. Consumer protection also lags behind cards. Visa’s A2A service adds card-style dispute rules, but few merchants use it yet. In addition, many SMEs still cite technical integration work as a barrier. As our piece on cross-border expansion showed, local payment methods only help when the checkout makes them easy.

What to watch next

Several signals will shape pay by bank adoption in 2027. In the UK, ecommerce use of commercial VRP is due in a second wave, and a new open banking entity should take shape. In the US, the CFPB’s open banking rule remains blocked in court, which leaves pay by bank adoption there dependent on provider deals rather than regulation. Meanwhile, Wero began replacing iDEAL for online payments in the Netherlands on 26 October 2026.

Taken together, the answers suggest a simple order of work. Make the option visible, explain it in plain words and reward the first payment. After that, returning-user flows do most of the work for pay by bank adoption. Pay by bank adoption grows when paying by bank feels as easy as paying by card.

FintechBits covers payments, banking and fintech developments for readers in the US and UK. This article is for information only and is not financial advice. Views expressed are those of the FintechBits editorial team.