‘Pay by Bank’ awareness declines as open banking grows

By Vriti Gothi

Consumer recognition of the term “Pay by Bank” in the UK has declined sharply even as open banking-powered payments continue to expand, according to new research from Yaspa.

The company’s 2026 Yaspa Index, conducted in partnership with YouGov, surveyed 2,157 UK adults and found that only 38% of respondents are familiar with the phrase “Pay by Bank,” down from 55% a year earlier. The decline comes despite open banking payments increasing by 53% year-on-year in 2025, highlighting a disconnect between consumer usage and recognition of the terminology used to describe the payment method.

The findings suggest that inconsistent industry language may be limiting broader consumer adoption. Payment methods powered by open banking are often labelled using a variety of terms such as instant bank transfer, account-to-account payments, or open banking payments. According to the report, this fragmented terminology can create confusion at the checkout stage, reducing the likelihood that consumers will intentionally choose the option even if they have used it before.

In contrast, long-established payment terminology continues to show stronger recognition among consumers. The report notes that traditional bank transfer systems such as BACS remain familiar to 77% of respondents, reflecting decades of consistent branding and usage.

The research also indicates that familiarity plays a key role in consumer trust when selecting online payment methods. Security and ease of use remain the primary considerations for UK consumers, but unfamiliar language can prompt users to revert to payment options they recognise, even if those methods are slower or less efficient.

“The 2026 findings are a clear signal that the industry’s lack of alignment on language is holding back the potential of open banking,” said James Neville, CEO at Yaspa. “Consumers value the speed and security that Pay by Bank offers, but they won’t actively choose a method they don’t recognise. Standardising a universal consumer-facing term is essential for scaling. By removing the burden on users to differentiate between identical payment methods, we foster the trust necessary for mass-market uptake.”

Open banking payments have been gaining traction across Europe and the UK as merchants and payment providers look for alternatives to traditional card networks, particularly for eCommerce and real-time transactions. These payment methods allow consumers to authorise transactions directly from their bank accounts, often offering faster settlement and lower processing costs.

Alongside the research, Yaspa highlighted its Intelligent Payments platform, which uses AI and real-time open banking data to deliver merchant insights such as affordability checks and fraud detection. The company said the platform is designed to support payment decision-making without disrupting the customer journey.

The report suggests that while infrastructure and usage of open banking payments continue to expand, achieving mainstream adoption may depend on greater standardisation in how these services are presented to consumers.