Fintech FIS has joined forces with Banked, the open banking solution provider, to drive new pay-by-bank offerings for both businesses and consumers.
As open banking matures in the US, the partnership between FIS and Banked looks to support the mission to bring pay-by-bank features and capabilities to critical industries like insurance, higher education, utilities, governmental agencies and more.
Pay-by-bank solutions simplify payments by combining the benefits of real-time payment rails with the flexibility and efficiency of open banking, where third-party financial service providers have direct access to banking data to complete digital payments.
As a result, businesses and consumers can make payments directly between business and consumer bank accounts without the need for card details, account numbers or sort codes. Businesses benefit from less fraud, reduced friction, faster settlement and lower processing fees, while consumers enjoy a smoother payment experience, easier verification and faster access to funds.
Seamus Smith, group president of global business-to-business payments at FIS, said: “Corporations and consumers are clamouring for solutions that move their money easier and faster, and as open banking and fraud prevention mature, FIS is in a unique position to start offering pay-by-bank solutions for both businesses and consumers.
“Partnering with Banked is a proof point of FIS’ commitment to bring frictionless payments to a wider spectrum of critical industries in a secure, convenient and cost-effective manner and complements the investments we’re making in next-gen payments infrastructure.”
A2A payments are on the rise
Digital payments are experiencing significant growth due to consumers’ increased adoption of digital wallets and mobile payment apps. They have become the preferred method of fulfilling payments for merchants and consumers alike.
According to the 2023 FIS Global Payments report, account-to-account (A2A) payments like pay-by-bank generated an estimated $525billion in 2022 e-commerce transaction value. The report also projects that A2A payments will grow at a 13 per cent compound annual growth rate.
Brad Goodall, co-founder and CEO of Banked, discussed the partnership: “Together, we are enabling businesses to leverage the power of open banking and real-time payments to offer their customers a superior payment experience.
“FIS takes a highly innovative approach to solving real pain points for their clients. They see the value pay-by-bank solutions can bring for a variety of use cases now and in the future, and we are excited to build out the partnership and bring new payment capabilities to market.”
In 2023, FIS helped spur the adoption of real-time payments by being one of the first in the fintech industry to complete testing and certification for the FedNow Service, and its new partnership with Banked promises to capitalise on that momentum to modernise a payments segment ripe for disruption.