Why are bank transfer payments in the UK more popular than ever?

Why are bank transfer payments in the UK more popular than ever?

James Booth

VP Head of Partnerships, EMEA at PPRO

Views 488

Why are bank transfer payments in the UK more popular than ever?

24.03.2020 10:30 am

The UK has one of the most innovative and fast-moving fintech sectors in Europe. Last year, investment in the British fintech sector hit $4.9 billion, up 36% from 2018. The UK has at least thirty online media titles dedicated to fintech, not to mention podcasts and YouTube channels.

All of which makes it odd that almost no one is talking about the quiet but unmistakable rise of UK bank transfer payment methods. Between 2017 and 2019, the number of UK online transactions paid for using a bank transfer increased by 36% . Bank transfer payment methods are now used in over 8% of all British online transactions.

To anyone who knows the UK payments market, this isn’t surprising. The best bank transfer payment methods offer transparency; allowing the consumer to see their balance in real-time, before they press the “buy” button. Payment is quick and easy — often just one or two taps on a mobile device — and there’s no need to enter card numbers, CVV codes, or any other payment information. And because it’s been vetted by their bank, consumers can have confidence in bank transfers as a payment method.

All these qualities answer the very real needs of both consumers and online merchants. Two separate pieces of research over the last year have found that 75% of UK consumers are worried about the security of personal data they share with companies and 68% aren’t ready to switch to digital payments specifically because of concerns about the security of new payment methods.

Finding a solution to this is necessary if UK e-commerce, particularly mobile commerce, is going to fulfil its potential for growth. It would also be good for consumers who want to shop from their mobiles: 76% say m-commerce is convenient and saves time (but that a poor checkout-experience undercuts this).

Using secure bank transfer apps is one way of allowing these consumers to have both convenience and confidence. This is certainly one of the reasons why more and more consumers choose Pay by Bank app in the UK.

How does it work, exactly? Pay by Bank app allows consumers to pay directly from their mobile banking app. At checkout, the consumer selects Pay by Bank app as their preferred payment method. They log into their bank app, see the payment request, select an account to pay from, and then confirm payment.

Each Pay by Bank app payment is made directly from the bank account and uses secure digital tokens, meaning no payment information is revealed. “Pay by Bank app makes buying online efficient, easy and manageable within seconds. It offers customers reassurance by allowing them to check they have the funds they need to make the payment and removes the need to share payment details. Ultimately, it offers peace of mind that the transaction is safely handled in the secure environment of their trusted mobile banking app,” says Suren Nawalkar, Senior Vice President of Pay by Bank app.

Consumer awareness and engagement with data privacy and security has never been higher. When you combine that with the ever-increasing demand for convenience when it comes time to pay, you get the perfect conditions for bank transfer apps to flourish. That’s why we think the adoption of bank transfer apps, including Pay By Bank app, is going to be one of the next big growth stories in our industry into 2020 and beyond.

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