In an interesting match-up, Mastercard is helping to support a payment type that has nothing to do with a card or a card number. Finextra reported that Wirecard will make it possible for all its online merchants to accept payment from consumers’ Pay By Bank app developed by Vocalink, a Mastercard company. Pay By Bank allows customers to pay for transactions directly from their checking account. The transaction to debit the users’ checking account is accomplished nearly instantly, removing much of the insufficient funds risk. Vocalink, as you will recall, is expert at developing real time payments, having been involved in launching several real time payments platforms around the world and is partnered with the Clearing House to develop such a platform here in the U.S.. Here’s more on the Wirecard, Pay By Bank partnership and how the app functions:
Pay by Bank app was created by Vocalink, a Mastercard company, and it enables people to make ‘digital debit’ payments for goods and services via their banking app, with payment made directly from their current account. From today, Wirecard online merchants will be able to integrate Pay by Bank app into their checkout pages, offering this new payment method to their customers.
With this, the process becomes quick and seamless, with no need for a separate PIN, password or a card number. Transactions take place in real-time and shoppers can see their account balance before making the payment. Each Pay by Bank app payment is made directly from the bank account and uses secure digital ‘tokens’, meaning you never reveal any financial details. Crucially, verification is handled by the existing, trusted bank app.
As with any digital payment app, there will need to be a reason for customers to use this app over card based solutions. If there are savings to merchants to use Pay By Bank over more traditional payment forms, they may need to pass along some of those saving to entice consumer interest.
Overview by Sarah Grotta, Director, Debit and Alternitive Products Advisory Service at Mercator Advisory Group
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