Open Banking Payment Providers Slash Checkout Card Fees

Choosing among open banking payment providers is no longer just a fintech infrastructure decision. For ecommerce, marketplaces, lenders, billers, and financial platforms, pay-by-bank can change the economics of checkout by using account-to-account payment rails instead of card networks—often with faster settlement and a different security model based on consent, bank authentication, and regulated API access.

The right answer is not “replace cards everywhere.” It is: use open banking payments where bank coverage, customer experience, settlement timing, pricing, and regulatory fit are better than your current card setup—and keep cards where they still deliver better acceptance or user familiarity.

1. What Open Banking Payments Are and How They Work

Open banking payments are bank-to-bank payments initiated through secure APIs with the customer’s explicit consent. Instead of entering card details, the payer selects their bank, authenticates with their bank, and authorizes a payment directly from their account to the merchant or payment recipient.

Open Banking Tracker defines an open banking provider as a licensed platform that exposes bank account data and payment APIs to apps, with customer consent, under frameworks such as PSD2, the UK Open Banking Standard, or CFPB Section 1033. Its 2026 directory tracks 73 providers, 57,200+ bank APIs, and coverage across 233+ countries.

Open banking providers, also called aggregators, reduce the need for businesses to connect directly to thousands of banks by offering a unified API layer for account data, verification, and payment initiation.

The core roles: AIS, PIS, and full-stack platforms

Open banking providers usually fall into three categories:

For pay-by-bank specifically, the relevant capability is payment initiation, often referred to as PIS or account-to-account payments.

How a pay-by-bank checkout typically works

While implementation details vary by provider, the basic flow is consistent across open banking payment platforms:

1. Customer chooses bank payment at checkout or in a payment flow.
2. Provider displays supported banks through a hosted flow, embedded component, or API-driven UX.
3. Customer authenticates with their bank, usually through strong customer authentication.
4. Customer consents to the payment and confirms the amount and recipient.
5. Payment is initiated bank-to-bank through regulated open banking rails.
6. Merchant receives confirmation and settlement according to the provider’s settlement model.

Open banking account providers—banks, building societies, and payment companies, also known as ASPSPs—maintain payment accounts for consumers and businesses. Open banking allows those accounts to connect securely to third-party products and services through regulated access.

2. Open Banking Payments vs Card Payments

The main difference between open banking payments and card payments is the rail. Cards rely on card network infrastructure and card credentials. Open banking payments use direct bank account authorization and payment initiation through secure APIs.

Open Banking Tracker describes PISPs as enabling direct bank-to-bank payments that bypass traditional card networks. That makes pay-by-bank especially relevant when a business wants to reduce dependency on card rails, improve bank-based verification, or align payment collection with account data.

Side-by-side comparison

Because the source data does not provide a universal card processing fee benchmark, businesses should compare open banking provider quotes against their own card acquiring costs.

The strongest commercial case for pay-by-bank is not theoretical savings. It is a line-by-line comparison of your actual card processing costs, settlement timing, fraud exposure, and operational needs against a provider’s confirmed pricing and coverage.

Pricing examples from open banking payment providers

PaymentProviders.io lists 23 payment providers under the open banking payment method. Some disclose public fees; many use custom pricing.

These figures show why businesses should avoid treating “open banking” as one uniform payment method. Publicly listed fees range from fixed per-transaction pricing to percentage pricing and custom enterprise models, while settlement ranges from instant to several business days depending on provider.

3. Where Pay-by-Bank Makes the Most Sense

Pay-by-bank makes the most sense where direct bank payment, account verification, or faster settlement improves the business model. The source data repeatedly highlights ecommerce, financial services, lending, marketplaces, trading, crypto, recurring billing, and bill or invoice payments as relevant use cases.

Ecommerce checkout

For ecommerce, open banking payment providers can offer a bank-based checkout alternative. PaymentProviders.io lists providers such as TrueLayer, Volt, Trustly, Noda, Brite Payments, Token.io, and Mollie with ecommerce or open banking payment use cases.

The business case is strongest when:

• Pricing: Your quoted pay-by-bank pricing is lower than your current card acceptance costs.
• Settlement: A provider offers instant, same day, or faster-than-current settlement.
• UX: Customers in your target market are comfortable authenticating through their bank.
• Coverage: The provider supports the banks your customers actually use.

Marketplaces and platforms

Marketplaces need to move money reliably between buyers, sellers, and platform accounts. Ivy’s provider database identifies Marketplaces & ECommerce as an industry category for open banking provider filtering, and PaymentProviders.io lists Ping Payments as focused on Nordic platforms, marketplaces, and civil society organizations.

Pay-by-bank can be useful where platforms want bank-based payment collection, direct account verification, or settlement workflows aligned with seller payouts. However, marketplaces should pay special attention to payout support, reconciliation reporting, and regional coverage because the source data shows provider capabilities vary significantly.

Lending and credit decisioning

Open banking is not only about payments. AISPs provide read-only access to balances, transaction history, and account information. Open Banking Tracker identifies account information services as essential for credit decisioning, account verification, and personal finance use cases.

For lenders, open banking can support:

• Income and affordability analysis through transaction data.
• Account verification before disbursement.
• Risk signals where providers offer enrichment or verification services.

Itexus’s buyer guidance also identifies verification and risk signals as one of the main buckets of open banking provider functionality.

Bill payments and invoice payments

Open Banking Tracker specifically notes that PISPs are ideal for invoice payments and recurring billing. PaymentProviders.io also marks some providers with recurring payment support, including Mollie and Ping Payments.

For billers, pay-by-bank can be attractive where customers are already accustomed to paying from bank accounts, and where the business benefits from clearer bank authorization and potentially faster settlement.

Crypto, trading, and financial services

Ivy’s provider database maps many open banking providers to Crypto, Trading, and Financial Services categories. Examples include TrueLayer, Yapily, Trustly, Plaid, Volt, Tink, Salt Edge, Token.io, OpenPayd, and Yaspa.

This does not mean every provider supports every crypto or trading use case in every jurisdiction. It means these sectors are explicitly represented in provider positioning, so businesses should verify permissions, supported countries, and risk policies directly with the provider.

4. Provider Comparison Criteria: Coverage, APIs, UX, Settlement, and Pricing

Selecting among open banking payment providers should start with a shortlist based on target markets and payment use case. Open Banking Tracker recommends evaluating bank coverage, geographic focus, use case support, regulatory compliance, pricing model, and developer experience.

Coverage: bank count and regional fit

Coverage quality matters as much as quantity. A provider with many global connections may still underperform if it lacks depth in your primary market.

Open Banking Tracker’s directory lists these provider coverage figures:

Open Banking Tracker also lists Token, Finicity, MX, and Envestnet | Yodlee under United States coverage, but the displayed bank counts in the provided data are limited. Businesses should verify current coverage directly in provider profiles or developer portals.

API capability: AIS, PIS, or both

Do not choose a provider solely because it is popular. Match the API capability to the business goal.

UX: hosted flows, no-code pages, and conversion

The source data does not provide conversion benchmarks, so businesses should test UX directly. However, provider descriptions do show different product approaches.

For example, Ivy’s database describes Noda as offering online merchants AI-powered no-code payment pages, instant bank transfers, and integrated payments via one API. Other platforms emphasize developer APIs, account data access, payment initiation, or embedded financial services.

When evaluating UX, ask:

• Bank Selection: How easily can users find their bank?
• Authentication Flow: Does the provider redirect to bank authentication or use an embedded experience where allowed?
• Fallbacks: What happens if a customer’s bank is unsupported?
• Mobile Flow: Is the bank authorization experience optimized for mobile?
• Consent Clarity: Does the user clearly understand what they are authorizing?

Settlement: instant is not universal

PaymentProviders.io shows settlement varies by provider. Some list instant settlement, others same day, and others 1–3 business days.

If settlement speed is a major reason you are considering pay-by-bank, confirm whether the listed settlement timing applies to your country, currency, business model, and risk category.

Pricing: public fees vs custom pricing

Open banking pricing models vary. Open Banking Tracker lists common models including per-connection, per-API-call, monthly active users, and enterprise licensing. PaymentProviders.io shows that many payment providers use custom pricing, while some publish transaction fees.

A practical pricing comparison should include:

• Transaction fee or percentage fee.
• Minimum monthly fees, if any.
• API call or connection costs, if using account data.
• Refund, payout, or reconciliation costs, if applicable.
• Enterprise support or SLA costs, if required.
• Sandbox availability, which is listed for many providers on PaymentProviders.io.

5. Pros and Cons for Ecommerce, Marketplaces, Lending, and Bill Payments

Open banking payments are not a universal replacement for cards. The value depends on the operating model.

Ecommerce

Marketplaces

Lending

Bill payments and recurring billing

6. Security, Consent, and Regulatory Considerations

Security is one of the strongest structural differences between open banking payments and traditional credential-based payment flows. The source data repeatedly emphasizes regulated access, consent, encryption, and strong authentication.

Consent is central

Open banking platforms operate with explicit user consent. Ivy’s provider database describes open banking platforms as systems that provide API-based access to bank accounts and payments, typically operated by regulated entities authorized as an AISP, a PISP, or both.

Users must authorize access or payment initiation through their bank. Access can also be revoked, according to Ivy’s FAQ.

Common security layers

Open Banking Tracker lists multiple security layers used by open banking providers:

• Strong Customer Authentication: Two-factor verification is required in regulated open banking flows.
• Encryption: Bank-grade encryption such as TLS 1.2/1.3 protects data in transit.
• Tokenized Credentials: Providers do not store bank passwords.
• Regulatory Compliance: Examples include PSD2, SOC 2, and ISO 27001.
• Consent Management: Users control permissioned access.
• Security Audits: Providers may use audits and penetration testing.

Open banking can reduce some payment security risks because customers authenticate directly with their bank and providers rely on regulated API access rather than storing bank passwords.

Regulatory frameworks to check

Open Banking Tracker highlights several regional frameworks and standards:

Open Banking UK also emphasizes that open banking account providers are built around security, compliance, expert support, and growth. For businesses, that means vendor due diligence should include both technical controls and regulatory permissions.

7. Implementation Checklist for Businesses

A strong open banking implementation starts before engineering begins. Use the checklist below to avoid choosing a provider that looks good in a directory but fails in production.

1. Define the payment use case

• Checkout: Are you replacing cards, adding a bank payment option, or routing selected transactions?
• Invoices: Do customers pay one-off bills or recurring obligations?
• Marketplace Payments: Do you need collections, payouts, or both?
• Lending: Do you need payment initiation, account data, or both?

2. Shortlist providers by geography

Use provider directories to filter by country and bank coverage. Open Banking Tracker specifically recommends filtering by region and use case, then checking provider profiles for bank coverage, developer portal links, and pricing signals.

• Europe/UK: Providers mentioned include TrueLayer, Tink, Yapily, Volt, GoCardless, Token.io, Brite Payments, Noda, and Salt Edge.
• United States: Providers mentioned include Plaid, MX, Finicity, Envestnet | Yodlee, and Token.
• Latin America: Providers mentioned include Pluggy, Klavi, Belvo, and Floid.
• MENA: Tarabut Gateway is listed as a MENA Open Banking Gateway.
• South Africa: Ozow is listed for South African EFT.
• New Zealand: POLi is listed for NZ bank transfers.

3. Confirm API capability

• PIS Required: Confirm payment initiation is available in the target market.
• AIS Required: Confirm account data access if you need verification or underwriting.
• Recurring Required: Verify recurring billing support; do not assume all PISPs offer it.
• Identity or KYC Required: Check whether the provider includes identity verification or data enrichment.

4. Validate the customer experience

Test the full journey in sandbox and production-like environments:

• Bank Search: Can customers find their bank quickly?
• Mobile Authorization: Does the flow work cleanly on mobile?
• Failure States: What happens if authentication fails?
• Unsupported Banks: Is there a fallback method?
• Consent Messaging: Is the permission request understandable?

5. Compare settlement and pricing against cards

Build a simple commercial model using your own transaction data:

6. Review compliance and security

• Licensing: Verify AISP/PISP authorization where relevant.
• Standards: Check PSD2, UK Open Banking, FDX, CDR, SOC 2, ISO 27001 as applicable.
• Consent Management: Confirm how users grant, view, and revoke access.
• Data Handling: Confirm encryption, tokenization, storage, and audit practices.
• Liability: Review contractual responsibilities for failed payments, fraud, and service outages.

7. Plan fallback and routing

Even strong providers will not cover every bank or every customer preference. Keep alternative payment methods available until your data shows pay-by-bank performs reliably for the target segment.

8. When Open Banking Payments Are Not the Right Fit

Open banking payments can be powerful, but there are cases where cards or another payment method may remain better.

When bank coverage is weak

If a provider does not support the banks your customers use, the checkout flow will fail or require fallback. Coverage figures in directories are helpful, but they are not a substitute for testing your actual customer bank mix.

When customers strongly prefer cards

The source data does not provide consumer preference benchmarks. If your customers expect cards, wallets, or card-linked rewards, pay-by-bank may work better as an additional payment method rather than a replacement.

When pricing is not clearly better

Some providers publish attractive fees, but many use custom pricing. If your negotiated card rates are competitive, or if open banking adds implementation and support costs, the commercial case may be weaker.

When you need card-specific features

The provided open banking sources focus on payment initiation, bank data access, account verification, recurring payments, and settlement. If your business depends on card-specific capabilities not covered by your open banking provider, keep cards in the mix.

When regulatory fit is uncertain

Payment initiation may require specific regulatory permissions. Open Banking Tracker notes that PIS requires additional licenses in most jurisdictions. If a provider cannot support your regulated use case in your operating market, do not proceed without legal and compliance review.

When operational workflows are immature

Open banking implementation touches checkout UX, customer support, reconciliation, settlement reporting, refunds, compliance, and consent records. If your team cannot yet support those workflows, start with a limited pilot.

Bottom Line

Open banking payment providers are most compelling when a business can use account-to-account payments to improve economics, settlement speed, or bank-based verification without hurting conversion. The strongest use cases in the source data are ecommerce checkout, invoice payments, recurring billing, marketplaces, lending, account verification, crypto, trading, and financial services.

The provider market is broad: Open Banking Tracker lists 73 providers, while PaymentProviders.io lists 23 open banking payment providers with settlement ranging from instant to 2–3 business days and pricing ranging from published transaction fees to custom enterprise quotes.

For commercial buyers, the best approach is pragmatic: shortlist by country and bank coverage, confirm PIS and AIS capabilities, test the UX, compare real pricing against your card costs, and verify regulatory permissions before scaling.

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