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Why ‘pay-by-bank’ faces adoption hurdles in US retail

February 5, 2024

For U.S. merchants butting heads with card networks over card swipe fees, the answer might be to bypass cards altogether and allow funds to move directly from the payer to recipient via account-to-account payments — the so-called pay-by-bank method.

The problem is that it’s far from catching fire among U.S. consumers.

Account-to-account payments have been around for decades. They’ve gained only limited momentum in recent years in the U.S. because the alternative — cards — have high transaction fees; increased adoption of pay-by-bank in other countries; and the launch of faster payments systems like FedNow and RTP, according to industry consultant Peter Tapling.

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