Pay-by-bank is a payment method that allows shoppers to transfer funds directly from their bank accounts without entering card details, according to BBC expert Peter Ruddick. Major retailers are now adopting pay-by-bank, with Amazon introducing it as a payment option for customers buying products or setting up Prime subscriptions. Pay-by-bank is offered by several well-known brands including Amazon, Ryanair, Just Eat, HMRC, and airlines.
5 billion annually, according to reports. However, pay-by-bank removes key consumer protections such as Section 75 of the Consumer Credit Act and chargeback protections that apply to credit and debit card payments, experts note. Despite this, the Consumer Rights Act still protects consumers if purchased items are broken or not as described, and refunds are often quicker with pay-by-bank, Ruddick added.
Consumer experts advise caution, with Money Saving Expert founder Martin Lewis warning on social media about the lack of protections with pay-by-bank. It is safest to stick with paying by card for big or important purchases due to the lack of protections with pay-by-bank, according to Daily Express - Finance. Looking ahead, physical stores are looking into pay-by-bank via QR codes, according to Ruddick.