Radial Adds Link Money’s Pay by Bank for Account-to-Account Payments

E-commerce platform Radial Inc. is giving its merchants a new payment option that bypasses traditional credit and debit card payments and instead relies on account-to-account transfers.

Dubbed Pay by Bank, the service was developed by Link Financial Technologies Inc., which does business as Link Money, an open-banking platform. King of Prussia, Pa.-based Radial says the payment option will be embedded on the checkout pages of merchants once they adopt it.

“The Pay by Bank option will be strategically positioned as part of the checkout-page design, right next to the main options that are generally available, manual credit card input, wallets (PayPal, Apple Pay, etc.), and buy now, pay later (BNPL) options,” Yvan Gilliard, Radial senior vice president of payment solutions and omnichannel, tells Digital Transactions News.

Though payment with a bank account for an online purchase is not new, it has usually been completed with a debit card. Pay by bank services eschew the debit card and use an open-banking connection to access payment via the consumer’s designated bank account. This can lower a merchant’s costs because such transactions typically cost less than one made with a bank card.

Radial pegs the potential reduction in fees at as much as 70% to 80%. And Pay by Bank can help reduce fraudulent transactions because consumers are required to authenticate payments in their banking apps, Radial says. The liability for Pay by Bank transactions lies with Radial.

“At no point in the process are consumers entering their bank-account information or their banking credentials on the merchant site or any third-party app,” Gilliard says. “The Pay by Bank technology will prompt and take the consumer onto their familiar banking app or Web site and within that secure environment validate the link and authorize the transaction. We are leveraging the trust and security in place on the banking end to validate those e-commerce transactions.”

The enrollment process, which happens in seconds, Gilliard says, starts when a consumer finalizes a purchase and goes to the merchant’s checkout page. She selects the Pay by Bank option. She follows a prompt to link her bank account and select the bank name.

Then, she’s directed to the bank’s app or Web site to enter her credentials manually or by using a biometric. The next prompt, within the banking app, is to choose which bank account to use for e-commerce transactions and then confirm the link to that account. She is then returned to the merchant’s checkout page to complete the transaction. San Francisco-based Link says the bank login information is not stored.

Consumers will enroll at each participating merchant. Gilliard explains that compliance requirements dictate that enrollment details cannot be shared across merchants, though the linking process is limited to a few seconds and clicks.

StubHub.com is testing the Pay by Bank option now and is live for approximately 50% of its customers with access for all customers arriving next week, Gilliard says.

Link says Pay by Bank is integrated with more than 3,400 U.S. financial institutions.