THE RISING POPULARITY OF UK BANK TRANSFERS

Britain has long been recognised as one of the most innovative and fast-moving fintech sectors in Europe. In 2019, investment in its fintech sector hit $4.9 billion, which was up 36% from the previous year [1]. The sector is so prolific it has at least thirty online media titles dedicated to covering it, and that’s without mentioning the additional podcasts and YouTube channels that cover the sector.

Consequently, it is odd that very few outlets are discussing the unmistakable rise of UK bank transfer payment methods. 2017 to 2019 saw the number of UK online transactions paid for via a bank transfer increase by 36% [2] and bank transfer payment methods are now used in over 8% of all British online transactions [2].

Anyone who knows the UK payments market will not find this surprising. The best bank transfer payment methods offer transparency; allowing the consumer to see their balance in real-time, before they complete a purchase. Payment is quick, easy and convenient – often actioned by mobile phone – without the need to enter card numbers, CVV codes, or any other payment information. And because it’s been vetted by their bank, consumers can have confidence in bank transfers as a payment method.

All these qualities answer the very real needs of both consumers and online merchants. Two separate pieces of research conducted last year found that 75% of UK consumers admit to being worried about the security of their personal data [3] and 68% are not prepared to switch to digital payments, specifically because of security concerns over new payment methods [4].

Finding a solution to ease this discomfort is essential if UK e-commerce, particularly mobile commerce, is going to fulfil its potential for growth. It would also be good for consumers who want to shop from their mobiles: 76% say m-commerce is convenient and saves time (but that a poor checkout-experience undercuts this) [5].

Using secure bank transfer apps is one way of allowing consumers to have both convenience and confidence. This is certainly one of the reasons why more and more consumers choose Pay by Bank app in the UK.

Pay by Bank app allows consumers to pay directly from their mobile banking app. At checkout, the consumer selects Pay by Bank app as their preferred payment method. They log into their bank app, see the payment request, select an account to pay from, and then confirm payment.

Each Pay by Bank app payment is made directly from the customer’s bank account and uses secure digital tokens, meaning no payment information is revealed to be exploited. “Pay by Bank app makes buying online efficient, easy and manageable within seconds. It reassures customers by allowing them to check they have the funds they need to make the payment and removes the need to share payment details. Ultimately, it offers peace of mind that the transaction is safely handled in the secure environment of their trusted mobile banking app,” says Suren Nawalkar, Senior Vice President of Pay by Bank app.

Consumer concerns regarding data privacy and security have never been higher. And when combined with the ever-increasing customer demand for payment convenience, you have the perfect conditions for bank transfer apps to flourish. As a result, we think bank transfer apps adoption, including Pay By Bank app, is likely to be one of the next big growth stories in the fintech industry in 2020 and beyond.

 

1.  https://www.finextra.com/newsarticle/35199/uk-fintech-scene-sees-record-investment-in-2019
2. Original PPRO research
3. https://www.computerweekly.com/news/252466155/UK-consumers-still-concerned-about-personal-data-security
4. https://www.fstech.co.uk/fst/Majority_Of_UK_Consumers_Fear_Contactless_Fraud.php
5. https://paybybankapp.mastercard.co.uk/~/media/Pbba/files/Pay_by_Bank_App_Best_%20Practice_Infographic

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