Stripe Expands Pay-by-Bank Offering in Partnership With TrueLayer

Stripe has teamed with open banking provider TrueLayer to expand its pay-by-bank offering.

The two companies had collaborated to launch a pay-by-bank offerings in the U.K., and will now bring that partnership to France and Germany, TrueLayer announced Wednesday (July 2).

“By offering a direct pay by bank payment method, Stripe is streamlining the checkout experience for French and German businesses, improving conversion rates and significantly reducing transaction fees,” the company said in a news release.

“With pay by bank payments consumers bypass entering card details and instead authorise payment directly from their bank accounts, typically via biometric methods.”

According to the release, the Stripe pay-by-bank product uses TrueLayer’s open banking infrastructure, which connects to bank accounts throughout Europe.

The partnership in Germany and France is happening as consumers in both countries are increasingly adopting pay by bank, with pay-by-bank payments in the European Union forecast to reach 30 billion in 2028. Germany and France, the EU’s largest economies, will be a significant driver of this growth, the release added.

Pay by bank is on the cusp of becoming one of the cornerstones of finance, Ed Dean, vice president of product at Nuvei, said in a recent interview with PYMNTS.

By allowing for quicker money movement, pay by bank gives businesses a clearer, more immediate picture of their financial standing. This added visibility, along with the inherent confidence that pay by bank brings, lets companies make more informed decisions regarding their liquidity.

Adoption of pay by bank, especially among consumers, is on the verge of a “natural progression” through a variety of use cases, leading to a “viral effect,” Dean said.

“While consumers are generational in their payment preferences, pay by bank offers an alternative to traditional methods like debit cards, especially within the eCommerce space, where ACH previously had limited traction,” PYMNTS wrote.

When consumers interact with a merchant through pay by bank, they are basically introducing their bank as a “trusted partner” into the transaction, Dean added.

In spite of its potential, pay by bank remains a largely untapped opportunity, though there is evidence that the proper incentives could help unlock widespread consumer adoption.

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

The study found that strategic incentives, especially things like discounts and cash-back offers, significantly raise interest even among consumers who were initially resistant.