Visa Pay-by-Bank Services for the US

Visa Pay-by-Bank Services for the US

Posted: June 6, 2024 | Updated: June 6, 2024

With technological advancements and the implementation of instant bank payment systems, pay-by-bank or paying directly from bank accounts could become as prevalent as using debit or credit cards in the US. This method is already widespread across Europe and many other regions.

Merchants benefit from reduced fees if they encourage customers to switch from credit cards to bank payments. Many consumers are already comfortable using direct bank payments for transactions like bill payments, and new technologies are enhancing this experience. However, paying by bank is less common in retail and eCommerce shopping. Nonetheless, recent technological improvements are minimizing obstacles and making it more practical. In a significant move, Visa, a leading card network, is now gearing up to introduce pay-by-bank services in the US.

Key Takeaways
  • Visa Introduces Pay-by-Bank Services in the US: Visa is expanding beyond traditional card services to offer direct bank-to-bank payment options, aiming to complement its existing debit, prepaid, and credit card offerings.
  • Reduced Fees for Merchants: Merchants could benefit from lower transaction fees by encouraging customers to use direct bank payments instead of credit cards, especially for bill payments, subscriptions, and loan repayments.
  • Success in Europe with Tink: Visa’s pay-by-bank model has seen significant adoption in Europe, driven by Tink, a payment platform owned by Visa. Tink’s partnerships and the growing trend towards open banking have facilitated this success.
  • Improved Efficiency and Security Over ACH: Visa’s pay-by-bank services aim to surpass ACH transactions in terms of quality, addressing issues like fraud and processing delays and offering a more efficient and secure payment method for large, infrequent transactions.

Visa Expands Beyond Cards with New Pay-by-Bank Services

Visa Expands Beyond Cards with New Pay-by-Bank Services

Visa has traditionally focused on its card services. Still, the company is now expanding to offer other types of money transfer services, aiming to complement its existing debit, prepaid, and credit card offerings.

The pay-by-bank model facilitates direct payments from a consumer’s bank account to a business’s bank account, eliminating the need for a credit or debit card. These transactions can cover any purchase but are commonly used for bills, subscriptions, and loan repayments.

In Europe, the adoption of such services has grown, highlighted by the success of Tink, a payment platform owned by Visa. Tink has introduced its pay-by-bank method through partnerships with several companies, signaling a strong move towards open banking, a system that allows more direct transactions between banks and businesses without intermediaries.

Although these developments could pose a competitive challenge to Visa’s traditional card business, the company is integrating these new services into its portfolio. The upcoming introduction of pay-by-bank services in the US aligns with the Consumer Financial Protection Bureau’s (CFPB) push towards a regulatory framework that supports more open banking services. This indicates a significant shift in how financial transactions could be conducted in the future.

Jack Forestell, Visa’s inaugural Chief Product and Strategy Officer, stated that the company has been diligently setting up the necessary infrastructure for launching its pay-by-bank service. This groundwork includes establishing connections with banks and forming agreements with banks and processors to ensure robust capabilities for customer authentication and linking. He mentioned that Visa has signed on some pilot customers and is now prepared to launch the pay-by-bank service.

A2A payment

Visa’s established reliability and security will be incorporated into the new pay-by-bank services, according to Forestell. He described the service as a straightforward digital process that customers will encounter in specific scenarios. Sellers will offer the option to pay via bank, powered by Visa. Users will simply click a button, authenticate with their bank, and the payment will be processed, he explained during the conference. Forestell noted that these services are likely to be used in areas where account-to-account transactions are common, particularly for large payments.

Forestell also highlighted certain areas where these services are useful—such as rent, loan payments, healthcare, life insurance, education, and long-term care. These are typically larger, infrequent payments. Although there is some use of cards in these sectors, the adoption rate remains relatively low.

Typically, such payments are conducted through ACH transactions, which have increased. However, Forestell believes that Visa’s pay-by-bank services could surpass ACH in quality.

Forestell pointed out that ACH transactions are problematic and inefficient, often due to issues with fraud and delays in processing. These delays disrupt the payment process, and he argues that Visa could overcome these challenges by offering a method that is both more efficient and secure. He suggests that these improvements could lead to higher transaction volumes and enhance the services provided by financial and commercial partners.

In Europe, Visa’s pay-by-bank services have experienced significant growth, especially following the acquisition of Tink. Over the last two years, payment initiation volumes have significantly risen. Furthermore, Tink has partnered with companies like Splitwise, Payop, and TransferGo to extend the use of pay-by-bank services.

About Visa

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Visa is a multinational payments technology corporation that facilitates the use of digital currency in place of conventional cash and cheques by tying together customers, companies, banks, and governments in more than 200 countries and territories. With the ability to process over 24,000 transactions per second, the company’s sophisticated processing network is renowned for its dependability, convenience, and security, which includes safeguarding against consumer fraud and ensuring merchant payments.

Although Visa does not provide credit, issue cards, or set rates and fees for customers, its technology innovations allow financial partners to offer a range of payment choices, such as credit, debit, and prepaid cards. Customers now have more payment options thanks to these advancements.

Governments worldwide are switching to digital currencies to reduce overhead costs and increase efficiency when distributing rewards and making purchases. Visa is making it easier for people to use digital currency and mobile technologies for financial management, online shopping, international transfers, and access to basic financial services by extending the reach of electronic payments beyond big cities to rural, unbanked areas. This expansion facilitates everyday financial operations and boosts economic growth.


Visa’s move to introduce pay-by-bank services in the US represents a significant evolution in payment options, aligning with technological advancements and consumer preferences. This new service is set to reduce transaction fees for merchants and enhance security and efficiency compared to traditional ACH transactions.

Building on its successful European model through Tink, Visa is poised to leverage its existing infrastructure and reliability to expand these services domestically. As Visa integrates these direct bank payment methods into its portfolio, it underscores a shift towards more direct, efficient, and secure financial transactions, potentially transforming the payment landscape in the US.

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