Pay by Bank, the consumer-facing brand for Open Banking-initiated payments, has seen adoption more than double over the past 12 months, with transaction volumes reaching 28 million per month according to figures compiled by the Open Banking Implementation Entity's successor body. More than 40 major UK retailers — including Marks & Spencer, Boots, and Currys — now offer the option alongside traditional card payments, driven by processing fee savings that can reach 80 per cent compared with credit card interchange.

The acceleration has been supported by improvements in the user experience that have closed the convenience gap with card payments. Biometric authentication on mobile devices now enables Pay by Bank transactions to complete in under four seconds, while new redirect-free flows developed by providers including Volt, Yapily, and Token.io have eliminated the clunky bank app handoffs that previously deterred consumers. "Eighteen months ago, Pay by Bank was a curiosity," said Jana Mackintosh, managing director of payments at UK Finance. "Today it is a serious commercial proposition that is reshaping merchant payment strategies across the high street."

The growth trajectory has prompted the Payments Systems Regulator to commission a study into whether Pay by Bank requires its own consumer protection framework analogous to Section 75 rights that currently apply only to credit card transactions. Consumer groups including Which? have argued that parity of protection is essential for mass adoption, while industry bodies counter that existing bank-level protections and the Faster Payments service guarantee are sufficient. The PSR is expected to publish its findings by autumn 2026, in a decision that could either accelerate or constrain the payment method's growth trajectory.