Pay by Bank: the growth in numbers

Pay by Bank is a fast-growing online payment method that lets shoppers pay for things directly from their bank account via their bank app. To do this, they simply go to the checkout and select ‘Pay by Bank’ where it’s available, instead of choosing to pay by card or other payment methods.

For merchants there are several reasons why Pay by Bank is more effective than other more established payment methods — like cards — including lower operational costs and fees, increased sales, higher conversion rates, reduced fraud, diversification of payment options and instant refunds. Customers enjoy its speed, security and seamless experience.

Sounds great, but what does the data show? Is Pay by Bank growing? Are shoppers using it? Will it take share of checkout from other payment methods? We’ve taken a deep dive into the statistics to find out the reality behind the numbers.

What has Pay by Bank growth been like so far?

The UK is leading the way

In the UK, we’ve reached over 25 million Pay by Bank payments every month. Compared to this time last year, that’s an 80% YoY increase in payments.

But, the number of payments alone doesn’t tell the whole story.

Key to Pay by Bank’s growth is the number of users, and importantly new users paying with Pay by Bank is increasing. There are now nearly 9 million people using Pay by Bank every month, with over 1 million new users in January 2025. This is an essential lever for growth because we know once a user has used Pay by Bank once, they are very likely to use it again. More users equals more payments. More on that later.

Europe is catching up, at pace

The growth of the number of instant payments across Europe is impressive, too. Growing by 50% each year, projected to reach 3 billion by 2028.

Key European markets are slightly behind the UK in terms of instant payment adoption. However, it is encouraging to see many of these markets growing at a similar or faster pace due to consumer demand for digital financial services. Look at Germany, where account-to-account payments make up 25% of all payments. France is similar with 23%, and Finland is even higher at 35%.

As a relatively new payment method, Pay by Bank is growing rapidly, and recent EU rules — the Instant Payment Regulations — look to make Pay by Bank an even faster and more cost effective payment method. Therefore Pay by Bank payments will continue to play a key role in instant payment growth across Europe, as it already has pan-European reach.

This is backed up by the high conversion rates we are seeing across Europe with our own merchants, plus the breadth and depth of coverage TrueLayer has. TrueLayer covers more than 95% of bank accounts in major European markets and this 100% API-based coverage is growing all the time. We invest a huge amount of time and resources in testing bank APIs, debugging and sharing our findings with banks to help them fix issues and improve their API quality, while minimising the impact for our merchants.

What’s been driving the growth of Pay by Bank?

Shoppers' changing attitude towards Pay by Bank

We recently surveyed 1,352 online shoppers and large ecommerce merchants and found out 23% of shoppers have already used Pay by Bank, 65% would feel comfortable using it as a payment method, which rises to 76% for 25-34 year-olds.

What does this tell us? It signals Pay by Bank is becoming a more used and recognised payment method at the checkout. It offers all the important things shoppers want when they pay; security, speed, convenience and clarity.

Once shoppers have used Pay by Bank once, they keep using it

We know that some of our merchants at TrueLayer see 85%+ of their Pay by Bank transactions coming from returning users. Why? It’s partly because returning user conversion rates are so high.

TrueLayer’s average returning user session conversion rate in the UK exceeds 95%, with countries across the EU quickly catching up. This is especially true in more mature markets like Finland which actually exceeds the UK, or Germany where we see conversion rates around 90% for returning users. As a comparison, this is often higher than cards, given SCA requirements for cards lead to significant drop off.

Put simply, once you’ve used Pay by Bank once, you are very likely to use it again. This contributes to quicker and increased growth.

The impact of TrueLayer’s user network is growing

TrueLayer's user network, comprising nearly 13 million active users ready to use Pay by Bank, is also contributing to this growth. On average, a new user joins the network every three seconds.

As an example, this means shoppers that have bought a takeaway on Just Eat Takeaway that are part of the user network already, are primed to subsequently select Pay by Bank when buying a holiday on lastminute.com or a flight with Ryanair (and vice versa) because they are familiar with it and have used it before.

Our network members on average convert at a 25% higher rate than first time users.

Shoppers care deeply about refunds

Talking of user experience, we know customers care about refunds. Our research shows 84% of shoppers will wait — at most — a week for their refund before it affects their perception of your brand. While 8 in 10 would even reconsider shopping with you again if they felt the refund experience was too slow.

As Pay by Bank enables shoppers to receive instant refunds, more and more merchants are integrating it. Supply and demand, a powerful combination.

What else is driving the growth?

• Card payment issues: for shoppers, Pay by Bank means no lengthy card numbers. For merchants, there are fewer middle-men to take their cut from each payment, and costs that arise from high chargeback rates and fraud are minimised.

• Policy and regulatory developments: In the UK, for example, the expansion of Pay by Bank use cases and in Europe the Instant Payment Regulations that are coming into effect in 2025 will lead to further adoption.

• Work to maximise the adoption of Pay by Bank: User journeys are improving, awareness of Pay by Bank is rising, and merchants are increasingly incentivising shoppers to use Pay by Bank. With global ecommerce sales set to hit $7.96 trillion by 2027, there is a significant portion of that volume that Pay by Bank can serve.

• Pay by Bank integration maturity: Gone are the days that a Pay by Bank integration is a heavy lift for a merchant. TrueLayer, for example, has an integration playbook that can be easily tailored to fit each merchant's specific requirements, allowing them to reap the benefits of Pay by Bank as quickly as possible.

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"We've worked with many partners in the payments space, but it's rare to encounter such a high level of competence and dedication. We really appreciate TrueLayer's responsiveness and data-driven mindset'

Pietro Di Sarno, Senior Product Manager at Just Eat Takeaway

What does the future look like for Pay by Bank?

The keyword is momentum

You’ve seen the early merchant innovators of Pay by Bank. This largely came in the financial services and igaming sectors. Similarly, the early adopters in ecommerce — Ryanair, JustEat Takeaway, lastminute.com & Papa Johns — have launched Pay by Bank options in the last six months. Now, mainstream adoption looks to be on the horizon, which will result in accelerated and sustained growth.

More merchants offering Pay by Bank, equals more shoppers using it. In turn, this means incremental improvements will be made by merchants and providers like TrueLayer, leading to higher conversion rates and share of checkout for merchants.

The importance of AIS

The number of AIS users is also growing. AIS enables merchants to securely access their users' account data. For example, account and card details, balances, and the transaction information associated with their accounts. This supports services such as account verification, account aggregation, affordability checks, rewards and insights, and money management. In January 2025, there were 6.34 million total AIS users in the UK, of which over 600,000 were new users.

Why is this important to Pay by Bank growth? In our view, it’s clear that businesses can unlock even more Pay by Bank benefits when it is used in conjunction with AIS. It makes Pay by Bank transactions as smooth and intuitive as possible. A good case in point is TrueLayer’s Signup+ solution, which combines onboarding with Pay by Bank in one seamless step.

Our prediction; expect to see the number of businesses using Pay by Bank and AIS in combination grow significantly over the next couple of years.

What should you do now?

Talk to one of our payment experts to find out how you could benefit from adding Pay by Bank to your checkout. As Pay by Bank enters the mainstream, now is the time to make your move.