Stripe Expands Pay by Bank to France & Germany – But Can It Dethrone the Card?

July 2025

Fintech & Payments

Michael Greenwood

Principal Analyst

Stripe, a global provider of payments software to businesses, has expanded its offering of account-to-account (A2A) payments to Germany and France through a continued partnership with TrueLayer, an Open Banking platform.

Stripe’s A2A product, called Pay by Bank, uses TrueLayer’s Open Banking infrastructure which connects bank accounts across Europe; enabling merchants to accept transactions directly from a customer’s bank account. This expansion follows the success of Stripe and TrueLayer partnering to offer the same service in the UK in September 2024. There is reason for Stripe to be optimistic about this expansion, with TrueLayer already processing €2 billion ($2.4 billion) of Pay by Bank transactions in France and €1.4 billion ($1.6 billion) in Germany. 

Advantages of Pay by Bank

There are several advantages for merchants accepting payments by Pay by Bank over traditional payment methods.

One of the primary advantages is the lower transaction fees, especially when compared to card networks. The cost of card transaction fees is significant to businesses, as it is the most common form of consumer payments in the markets in which Stripe has so far launched Pay by Bank.

Another important advantage for merchants is the lack of chargebacks on Pay by Bank.

Chargebacks, both legitimate and fraudulent, represent a significant cost for many merchants. The large increase in fraudulent chargebacks in recent years has only increased the burden. Even when a fraudulent claim is beaten by a merchant, it takes time. This is a time when the merchant does not have access to the payments; interrupting cashflow which can push businesses to rely on financing, further increasing costs. Chargebacks also require a merchant to allocate resources to fight the chargeback, whether that is staff spending time putting together evidence, or the merchant spending money on a chargeback management platform to undertake this task.

Another benefit of Pay by Bank is its increased security. In the markets Stripe is targeting, there are clear Open Banking regulations, as well as the requirement for strong customer authentication from the Second Payment Services Directive (PSD2). These, together with the fact banks employ their own strong anti-fraud systems, mean that Pay by Bank is relatively resistant to fraud.

These advantages are more attractive to small and medium-sized enterprises (SMEs), as these costs represent a larger proportion of costs for merchants of this size, compared to large enterprises and multinationals who are more able to absorb the additional costs. As Stripe’s primary customer base are SMEs, this makes Pay by Bank a particularly valuable addition to its payments acceptance offering.  

Another advantage for merchants is customer satisfaction, given the convenience that Pay by Bank provides. To pay using Pay by Bank online, the consumer simply has to select the Pay by Bank option at checkout and then verify their identity. This is quicker than manually entering payment card details and can be more secure as it can be verified using biometric verification. Likewise, refunded monies can be back in the customer’s bank account within seconds, minimising a too-often significant cause of frustration for consumers. 

Juniper Research expects that these advantages will drive an 80% growth in the number of online A2A payments users between 2025 and 2029.

Total Global Online A2A Payment Users (m), 2025 vs. 2029

Source: Juniper Research

Challenges of Pay by Bank

Despite these advantages, Pay by Bank is not without its challenges.

The most significant challenge is consumer attitude. Many consumers are simply not aware of Pay by Bank as a payments option. Those who are aware of it may not fully understand what exactly it is or understand the advantages it offers over traditional payment methods. This compounds with consumers’ existing preference for card payments. Consumers are familiar with cards and trust them to be secure. There is also consumer protection in place, in markets such as the UK; ensuring that consumers get their money back if they are a victim of fraud that was not their fault. This makes any security advantages of Pay by Bank less of a concern for consumers.

Another disadvantage of Pay by Bank, compared to credit cards, is its inability to extend lines of credit or offer rewards for its use. This means those who use credit cards are very unlikely to give up these benefits for the additional convenience of using Pay by Bank. 

A limitation of the payment method is its reliance on Open Banking regulation to enable it, without needing to partner with the consumer’s bank. Without Open Banking, the process of enabling Pay by Bank is significantly complicated, and banks’ unwillingness to partner to allow this can significantly restrict coverage. This means Pay by Bank is unlikely to gain much traction in any market that does not have Open Banking regulations to support this payment method.

Another challenge is facilitating cross-border transactions using Pay by Bank. Due to Pay by Bank’s reliance on regulations facilitating the payment method, there are markets, such as the US, where merchants are less likely to accept it. Equally, for merchants that have many international customers, a proportion of these customers will not have Pay by Bank supported in their country. This contrasts with the major card networks, where merchants will have customers in nearly every market and facilitate cross-border transactions between them regularly. This is not an issue within the EU, as all countries have the same Open Banking regulation, as do other countries which have signed up for regulatory alignment.  

Pay by Bank is gaining traction in markets where the regulatory framework is in place. Partnerships, such as the one between Stripe and TrueLayer, will further boost this payment method, with it becoming easier for merchants to accept these payments. Juniper Research expects that Pay by Bank will continue to grow over the coming years, especially if Pay by Bank providers focus on raising awareness among consumers. However, it will be quite some time before it becomes a true competitor to the major card networks.

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 Digital Wallets, Digital Identity, and Instant Payments; helping industry leaders navigate change and identify new opportunities.