Pay by Bank Pursues the American Dream

April 2026

Fintech & Payments

Michael Greenwood

Principal Analyst

Last month, US-based cloud payment orchestration platform Gr4vy announced its partnership with Open Banking data network Plaid to enable merchants using Gr4vy to offer Pay by Bank at checkout.

This partnership will allow Pay by Bank, also called account-to-account (A2A) payments, to be offered through a single integration by giving access to Plaid’s bank connectivity; allowing customers to authenticate and pay directly from their bank account at checkout. Plaid’s network is connected to over 12,000 financial institutions across the US, Canada, the UK, and Europe. 

Source: Gr4vy

What makes this partnership particularly noteworthy is Plaid’s strong presence in the US - a market where Pay by Bank is not well established. The payment method is far more mature in the UK and EU due to the strength of Open Banking regulation. In 2018, the EU required all banks to share their customers’ data securely with authorised third-party providers via APIs, with the introduction of the Revised Payment Service Directive (PSD2). This regulation allows Pay by Bank providers to offer the service for consumers without the need for individual agreements with each bank; making it far easier to achieve widespread coverage. This has seen a surge in Pay by Bank in these markets, with 10 million people using Pay by Bank monthly in the UK.  

This contrasts with the US, where there are not strong and clear Open Banking regulations. In October 2023, the Consumer Financial Protection Bureau (CFPB) proposed a rule to implement section 1033 of the Consumer Financial Protection Act, which would give consumers the right to access and share their financial data.

This rule, if adopted, would establish a clear federal regulation for Open Banking, with the CFPB overseeing its implementation. As things stand, these rules have not been implemented and the CFPB is facing restructuring; casting doubts over the potential implementation of this regulation. Alongside this, several states have implemented, or are considering implementing, their own Open Banking legislation. There are also industry-led initiatives, such as the Financial Data Exchange (FDX), that are establishing voluntary data-sharing standards. The FDX is a non-profit industry standards body that created the FDX API - a technical standard for sharing financial data. The FDX has 200 member organisations connecting 114 million customer accounts.  

Source: FDX

This demonstrates the fragmented nature of the Open Banking space within the US. This presents challenges for Pay by Bank providers looking to grow the payment method within the US, as it means the quality of coverage varies extensively by region; limiting its appeal to major brands. In particular, Pay by Bank providers in the UK have been successful in gaining buy-in from large eCommerce marketplaces, such as Amazon and eBay, which plays an important role in normalising the payment method for eCommerce. In a market such as the US, where access to consumers’ accounts is patchy, there is less reason for a national player such as Amazon to offer Pay by Bank, as a significant proportion of its customer base will not be able to use it.

The key selling point of Pay by Bank to merchants is lower fees compared to credit and debit cards. However, this is not the only advantage to merchants: a Pay by Bank transaction is authenticated by the user’s bank when they initiate the transaction; reducing the burden of verifying the consumer on the merchant.

Another benefit for merchants is the lack of a chargeback process. Chargebacks are a significant cost for merchants, with friendly fraud being a significant concern for eCommerce merchants in particular. As there is no chargeback mechanism and transactions are finalised immediately, a merchant does not need to worry about revenue being taken and incurring costly fees on top of that. This does not remove a merchant’s requirement to offer refunds, but does speed up the process for the consumer. These are all strong motives for merchants to adopt; however, in the US, merchants are put off by the fragmented nature of consumer availability. 

The fundamental issue for Pay by Bank in the US is one of connecting merchants to the customers. Without the federal government implementing nationwide Open Banking requirements, Juniper Research believes that Pay by Bank will be limited to a more niche payment option.

However, if regulations enable Open Banking to offer far wider coverage, then Pay by Bank offers solutions to significant pain points for merchants. In particular, high card fees in the US make Pay by Bank even more appealing than in markets where it has already taken off. Juniper Research recommends that Pay by Bank providers continue to work closely with Open Banking networks to broaden the number of customers able to use Pay by Bank, while proactively working with regulators to support Open Banking regulations.

As a Senior Research Analyst, Michael delivers in-depth insights into the fast-evolving worlds of digital identity and payments. His recent work spans critical topics such as B2B Payment Cards, B2B Payments, and Chargeback Management; helping industry leaders navigate change and identify new opportunities.