Open Banking for Merchants
Letting customers pay you directly from their bank account.
Every card payment you accept takes a percentage. On a small sale that is tolerable. On a large invoice it is a line item you notice.
Pay-by-bank removes the card network from the route entirely. The customer authorises a payment with their own bank, and the money moves directly to your account.
How it works
What changes for your business
| Card payment | Pay by bank | |
|---|---|---|
| Route | Customer → card network → acquirer → you | Customer's bank → your account |
| Cost per transaction | Percentage of the sale, plus fixed fees | Typically a flat fee, independent of basket size |
| Settlement | Usually days | Often near-instant |
| Chargebacks | Possible for months afterwards | Not applicable |
| Card data | Handled and stored, with the compliance burden that follows | None handled at any point |
| Failed payments | Expired cards, limits, declines | Authorised against the real balance at the moment of payment |
Where it fits best
- B2B invoices. The clearest case. Large amounts where a percentage fee hurts, and where the payer is a business with a bank account rather than a card.
- Recurring top-ups. Once a customer has authorised a connection, repeat payment takes a tap instead of re-entering card details.
- Marketplaces and payouts. Faster settlement means less working capital sitting in transit.
- Hospitality and retail. Combined with the digital menu and QR ordering, it removes the card terminal from the table.
What it does not replace
Cards are not going away, and it would not help you to pretend otherwise.
Customers expect to pay the way they prefer. Card payments carry consumer protections that bank payments do not — the absence of chargebacks cuts both ways. And a one-off customer buying something small may simply not want to authenticate with their bank to do it.
In practice pay-by-bank sits alongside cards and wins where the economics favour it. Larger transactions tend to migrate to it over time; small ones often stay on cards. Running both and letting the mix settle is the sensible approach.
The regulatory distinction, plainly
Reading account data and initiating a payment are not the same permission.
| What it is | What it allows | |
|---|---|---|
| Account information | What consumer account linking uses | Read balances, confirm ownership |
| Payment initiation | What merchant pay-by-bank uses | Move money on the customer's authorisation |
These are separate permissions under PSD2 and under the CBUAE Open Finance framework. A provider authorised for one is not automatically authorised for the other, which is why availability depends on your market rather than being switched on everywhere at once.
Getting started
Availability is scoped per merchant and per market, since it depends on provider licensing in your jurisdiction and on your business type. Write to office@isapexchange.com with your market, your business model and your current payment setup, and we will confirm what is possible and what it would cost.
See also our payment solutions and payroll solutions.
Frequently asked questions
How is this different from linking my own bank account?
Linking your own account is account information: reading balances and confirming ownership so you can fund transfers. Accepting customer payments is payment initiation: a customer authorising money to move to you. These are separate permissions under PSD2 and under the CBUAE Open Finance framework, and a provider authorised for one is not automatically authorised for the other.
How does the cost compare with card fees?
Card fees are typically a percentage of the sale plus a fixed amount, so they scale with basket size. Pay-by-bank fees are typically flat regardless of amount. The larger the transaction, the wider the gap. On a large B2B invoice the difference can be substantial; on a small retail sale it may be marginal.
How fast do funds arrive?
Usually near-instant, depending on the payment rail in the market. That is materially faster than card settlement, which typically takes days, and it reduces the working capital tied up waiting for funds.
What about chargebacks?
Chargebacks do not apply. The customer authorised the payment directly with their own bank, so there is no card-scheme dispute mechanism behind it. That removes a category of risk and cost, but it also means the consumer protections customers get with cards are not present — which is why cards remain the right choice for some transactions.
Do we still need to handle card data?
Not for pay-by-bank transactions. Nothing card-related is entered, transmitted or stored, so that part of the compliance burden does not arise for those payments. If you continue accepting cards alongside, your existing obligations for those remain.
Should we stop accepting cards?
No. Customers expect to pay the way they prefer, card payments carry consumer protections that bank payments do not, and a one-off customer may not want to authenticate with their bank for a small purchase. Pay-by-bank works best alongside cards, winning where the economics favour it rather than replacing cards everywhere.
Which businesses benefit most?
Those where card fees bite hardest: high average transaction values, thin margins, or high volume. B2B invoicing is the clearest case. Recurring top-ups benefit from the repeat-payment flow. Marketplaces benefit from faster settlement. Hospitality can combine it with QR ordering to remove the terminal from the table.
What does a customer actually see?
At checkout they choose Pay by Bank, select their bank from a list, log in with their own bank and approve a payment showing the amount and payee. They never enter card details, and they never enter banking credentials on your site.
Is this available for my business?
It is scoped per merchant and per market, because it depends on provider licensing in your jurisdiction and on your business type. Contact iSAP Exchange with your market and business model and we will confirm what is possible.
How does it fit with our existing payment setup?
It sits alongside what you already have rather than replacing it. Most merchants run pay-by-bank as an additional option at checkout and let the mix settle naturally, with larger transactions gravitating to it over time.
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