Pay-by-Bank Interest Jumps 72% With Incentives, New Report Shows

Despite its potential, pay by bank, or open banking payments, remains a largely untapped opportunity, but a new report suggests that the right incentives could be the key to unlocking widespread consumer adoption.

The collaboration between PYMNTS Intelligence and Trustly, titled “What Consumers Need for Pay by Bank to Catch On,” explores U.S. consumers’ current awareness of and inclination towards using pay by bank.

The study shows that strategic incentives, particularly discounts and cash-back offers, significantly boost interest even among the initially resistant. The report, based on a census-balanced survey of 2,225 U.S. consumers conducted in July, underscores that while current usage remains modest, future growth hinges on effectively engaging key demographics and highlighting the applicability of pay by bank beyond traditional retail transactions.

The report identifies a significant awareness gap as a primary hurdle, with 56% of consumers stating they are simply not familiar with pay by bank. However, the research highlights the power of incentives in bridging this gap, demonstrating a 72% increase in interest when consumers are offered cash-back discounts or loyalty benefits.

This surge in interest extends even to those who initially express no inclination towards this payment method, indicating a substantial opportunity for providers to sway even skeptical consumers. Furthermore, the study pinpoints Generation Z and high-income individuals as particularly receptive to pay by bank, especially when coupled with incentives. These demographics, along with those already intrigued by the concept, represent the most promising early targets for driving adoption.

The study uncovered the following key data points:

72%: The increase in consumer interest in using pay by bank for payments when offered incentives like cash-back discounts or loyalty benefits.

56%: The share of consumers who reported being unaware of pay by bank as a reason for not using it, making it the most prevalent reason cited.

41%: The share of consumers already using pay by bank who are intrigued about using it for non-retail transactions such as ridesharing, highlighting the potential beyond traditional retail.

Looking ahead, the report suggests that pay by bank’s appeal extends beyond retail purchases. Consumers already using pay by bank show significant interest in leveraging it for transactions such as ridesharing and betting, indicating promising avenues for expansion.

Notably, the ease of use of pay by bank is particularly pleasing to 39% of current users, and even 20% of resistant consumers acknowledge this as a potential benefit.

While discounts prove to be a powerful motivator overall, the report also reveals that consumers expect larger discounts for retail products compared to non-retail services to incentivize pay by bank usage. This nuanced understanding of consumer expectations across different transaction types will be crucial for businesses looking to effectively implement pay by bank and capitalize on its growing potential.