Lynk Offers Pay By Bank to Help Smaller Retailers

Payments platform Lynk has added Pay by Bank to its portfolio due to high customer demand.

The feature lets businesses reduce their credit card processing fees and get immediate access to revenues while guarding against transaction failure and fraud, the company said in a Tuesday (Jan. 17) news release.

“Credit cards are one of the most expensive means of payment for businesses, especially in today’s high inflation environment in which issuers are raising fees, and fraud and chargebacks continue to increase at alarming rates,” Lynk Founder and CEO Nabi Awada said. “In many cases, these costs are passed onto the consumer.”

According to the release, the offering is geared toward smaller retailers. It is available now to current Lynk customers, with a waitlist for new customers.

PYMNTS profiled Lynk last year, saying the company’s platform “puts a Starbucks-style owned payment solution in the hands of businesses of any size, taking credit card interchange fees out of the cost equation for merchants who then pump those savings back into meaningful consumer rewards.”

Speaking with PYMNTS’ Karen Webster, Awada likened widely-used payment systems to toll bridges that consumers must pay to cross as they use methods like credit cards to make purchases and pay interchange in the process.

“Everyone’s taking their own percentage, which makes it really hard for merchants to actually generate not only a decent profit but more around their margins themselves,” he said.

With a nod to the Starbucks model, Awada added, “The idea is that we move a lot of the intermediaries out of that system … and a lot of the savings are up to 90% off traditional processing. Most of the companies we deal with are about 3.5% to 4% on average, but we’ve seen that as high as 5% per transaction.”

In a separate interview, PYMNTS explored Pay by Bank with Trustly CEO Alex Gonthier, who said the concept is ready to establish itself as an alternative to credit cards.

“There’s a significant runway for paying for purchases directly from a checking account through an online bank transfer to gain traction in the United States,” PYMNTS wrote at the time.

Research shows that 30% of consumers are interested in trying new payment methods. In the report “New Ways To Pay: Aligning Consumer And Merchant Payment Preferences,” PYMNTS and Nuvei found that two-thirds of consumers who are interested in trying new payment methods are “very” or “extremely interested” in using online bank transfers. While 37% of consumers overall had used the method to pay a bill in the prior month, just 10% had used their accounts to pay a merchant.