Bank of America Backs UK FinTech Banked to Deliver Pay by Bank Solution

FinTech Banked raised $20 million in a funding round led by Bank of America (BoA) to bring more customers the Pay by Bank solution offered by the London startup.

With Pay by Bank, online shoppers in the U.K. can make card-free purchases and have the money taken directly out of their bank accounts at checkout. The payment option is streamlined and more secure, since it eliminates much of the data merchants have to store about its customers. Because the funds are deducted from a person’s bank account, cards are bypassed, and with it, the processing fees that come with Visa and Mastercard.

See also: UK Payments Watchdog Calls for Credit Card Reforms

Matthew Davies, Bank of America’s head of Global Transaction Services in Europe, the Middle East and Africa told Bloomberg that the way people pay merchants online has been the same “for a very, very long time.” He said it’s time to provide numerous ways for shoppers to pay online, to offer choices.

There’s been a lot of buzz about the card processing fees that payment networks such as Mastercard and Visa — the two biggest worldwide — charge. It’s been a point of content among merchants, banks and the networks.

Among retailers, the fees to accept electronic payments have been a bone of contention for many years, with aggregate annual totals in the U.S. topping $100 billion annually, according to Bloomberg. For customers paying with premium cards, the interchange rates are even higher and hit every time the card is used.

Read more: Interchange Fees Back in US Antitrust Spotlight Post Amazon UK Visa Card Ban Reversal

The subject has been a particularly fueled debate in the U.K. following Brexit. With the U.K. now operating outside of the European Union, both Visa and Mastercard have increased some fees — a move that has triggered heated discussions and intense scrutiny. At one point, Amazon said it was going to stop accepting Visa cards issued in the U.K., but later reversed its decision.