Cards, Pay-by-Bank and Multi-Rail Banks

Consumers continue to use debit and credit cards for the majority of point-of-sale and online purchases, while merchants and banks add pay-by-bank account transfers and open banking options to reduce costs and accelerate settlement.

Banks, card networks and fintechs are building multi-rail platforms that combine card networks, real-time clearing systems and open banking APIs. On a single checkout page, shoppers can often choose a branded card, a wallet tied to a card network, a real-time bank transfer or an authenticated account-to-account payment.

Merchants have adopted pay-by-bank for lower processing fees and fewer chargebacks. Account-to-account payments can settle faster than some card flows and include payer account details that reduce disputes. Adoption has been strongest in e-commerce, bill payments and large-ticket transactions where settled funds and transaction authenticity are priorities.

Regulation and payment infrastructure have shaped adoption. In Europe and the UK, PSD2 and national open banking initiatives created standardized APIs and customer-consent rules that allow third-party payment initiation. Real-time rails such as SEPA Instant and Faster Payments support immediate settlement. In the United States, same-day ACH, The Clearing House’s RTP network and the Federal Reserve’s FedNow service have expanded technical options for faster bank transfers, though consumer uptake of pay-by-bank remains lower in the U.S. than in parts of Europe.

Technical work for multi-rail integration includes tokenizing card credentials for secure reuse, building consent-driven API flows for open banking payments and encrypting bank-to-bank messages. Payment providers develop routing logic and risk scoring to choose between card networks, instant rails or open banking APIs based on cost, speed and fraud risk. Integration costs and support for multiple standards present challenges for smaller merchants and older bank systems.

Consumer preferences affect use. Many shoppers opt for cards because of rewards programs, familiar protections and wide acceptance. Merchants therefore offer pay-by-bank alongside card options and route specific transactions to lower-cost or guaranteed-settlement rails where appropriate. In markets where digital banking apps and account-to-account authentication are common, consumers select bank-based payments more often.

Some banks issue cards while exposing APIs that let merchants confirm balances or initiate payments directly. Card networks have introduced tokenization and programs to integrate with open banking so merchants can present a seamless checkout that preserves card-based options when needed.