Pay by Bank Poised for Explosive Growth as Merchant Demand Surges, Token.io Survey Finds

Pay by Bank is transitioning from a niche alternative to a mainstream contender as major retailers like AliExpress adopt the technology across Europe. For fintech professionals, the shift toward recurring payments and point-of-sale integration signals a critical phase where open banking must solve for convenience and consumer protection to challenge established card dominance.

What was announced

The annual ‘Pay by Bank Signals & Trends’ survey, produced by Token.io and Open Banking Expo, highlights a significant shift in the European payments landscape. Data gathered from banks, payment service providers (PSPs), third-party providers (TPPs), and merchants shows that 72% of banks and 87% of PSPs now offer or accept Pay by Bank. This adoption is mirrored in the retail sector, where AliExpress has integrated the option at checkout for customers in the UK, France, Spain, and Germany. Additionally, platforms like Octopus Money are utilising the technology to allow customers to fund investment and pension accounts directly from their banking apps.

The report identifies recurring payments and one-click capabilities as the "missing links" for mainstream success, with 59% of respondents calling them essential for Pay by Bank to compete with cards. Subscriptions and bill payments are seen as the most fertile ground for displacing existing methods (62%), followed by general e-commerce (59%). In the UK, the focus is on commercial variable recurring payments (cVRPs), with 89% of respondents reporting merchant demand for these features ahead of the UK Payments Initiative launch in June 2026.

Consumer trust remains a focal point; 84% of respondents globally—and 93% in the UK—believe a unified brand is necessary to drive adoption. The survey also reveals a strategic divide: while 61% of merchants prefer to access Pay by Bank through their existing PSPs, 45% of PSPs view direct open banking providers as a growing competitive threat as some merchants choose to bypass traditional gateways. Furthermore, liability for fraud remains unsettled, with 24% of businesses suggesting banks should cover losses, while 20% favour a central scheme.

"The value proposition for Pay by Bank has long been understood across the payments ecosystem, and our survey shows that merchants are increasingly recognising its potential across a broad range of use cases. From subscriptions and bill payments to e-commerce and B2B, we’re seeing growing demand for Pay by Bank at the checkout."

Todd Clyde, CEO at Token.io

The companies involved

Token.io is a specialist in Pay by Bank infrastructure, providing the underlying technology that enables merchants and financial institutions to facilitate direct account-to-account transfers. The company has established a significant presence in the European open banking ecosystem, focusing on removing friction from the payment process to compete with traditional card networks. Led by CEO Todd Clyde, the firm operates in a market where the technical bridge between banks and retailers is increasingly becoming a core component of digital commerce. The company's infrastructure is designed to scale account-to-account payments by integrating directly into the existing commercial stacks used by merchants.

Open Banking Expo is a dedicated platform for the open banking, open finance, and open data sectors. It serves as a central hub for industry professionals to share insights and track the evolution of regulatory frameworks and technological standards across the UK and Europe. The organisation’s partnership with infrastructure providers like Token.io for annual sentiment tracking provides a benchmark for the industry's progress. Together, these entities represent the infrastructure and community layers of the shift toward account-to-account payments, navigating a landscape defined by both rapid technological advancement and complex regulatory requirements.

What FF News has reported before

FF News has closely followed the expansion of the open banking ecosystem through both Token.io and Open Banking Expo. We recently reported that Open Banking Expo UK & Europe 2026: Vinted, Santander, and Monzo Leaders to Headline Speaker Line-up will feature major industry figures discussing these very trends. Token.io’s internal growth has also been a focus, including when Token.io Appoints Gil Danziger as CTO to Scale Pay by Bank Infrastructure to support its technical scaling. The company’s influence on policy and standards is evident through its leadership roles, such as when a Token GmbH Managing Director Appointed to Berlin Group openFinance Advisory Board and Token.io Chief Product Officer Charles Damen Elected to UK Payments Initiative Board.

What this means

The findings suggest that Pay by Bank is entering a "make or break" phase where technical availability is no longer the primary hurdle; instead, the industry is grappling with user experience and trust. The demand for cVRPs and one-click checkouts indicates that open banking must replicate the convenience of "stored cards" to survive in high-volume e-commerce and subscription markets. The tension between PSPs and open banking providers is particularly noteworthy, as merchants looking to cut costs may bypass traditional gateways. However, the lack of consensus on consumer protection remains a systemic risk; without a clear "chargeback" equivalent or a unified brand, mass consumer confidence will likely remain elusive.