Bank payments boom as consumers embrace new spending patterns

Plaid, a financial services company, believes that pay by bank payments are nearing widespread adoption as consumers form new habits. Pay by bank enables consumers to make payments directly from their bank accounts, eliminating the need for cards or cash. The success of bank-linked payments depends on their simplicity and ease of integration into merchants’ checkout flows. Use cases that are gaining traction include bill payments, monthly rent payments, and account funding. To encourage adoption, some enterprises offer discounts for pay by bank transactions or charge a premium on card-based payments. Plaid expects that pay by bank will become a “fantastic, embedded experience” and believes that the use cases for this payment method will expand over time. The company has already witnessed increased demand for pay by bank from its merchant and financial institution customers. The gig economy, which historically has faced delayed and lengthy payment settlement processes, has seen rapid adoption of pay by bank due to the instant access to funds it provides to gig workers. Plaid predicts that pay by bank will follow a similar trajectory to card payments, with businesses increasingly pushing for bank-linked payments in the coming years.