What makes pay by bank safe? A guide

Neonomics
June 7, 2024
June 7, 2024
4 minutes

If you have ever come across “Direct bank payment” or “pay by bank” in an online checkout, chances are you are wondering: what is it, why would you choose pay by bank in a payment flow, and how can you ensure your financial data is protected? We’re here to answer those questions and help you understand that better, so let’s dive in.

What is pay by bank?
Pay by bank, also known as Account-to-Account (A2A) payments, is a direct bank payment option in an online checkout process that enables you to pay for goods and services directly with your bank account, eliminating the need for a credit or debit card. This method is typically more secure than a card payment, because it uses your bank's security and authentication systems and eliminates the need to enter card details, while also bypassing third-party providers to process a payment – which means your financial information isn’t bouncing around between a bunch of third parties.  


How does pay by bank work?
Here is a quick overview how it works as a first-time user:

  1. Select "pay by bank" at checkout: When you're ready to pay for your online purchase, you'll see various payment options at checkout. Choose the "Pay by Bank" option from the list.
  1. Choose your bank: You'll be presented with a list of participating banks. Select your bank from this list to proceed with the payment.
  1. Secure login to your bank: Once you select your bank, you'll be redirected to your bank's secure login window to complete a Strong Customer Authentication (SCA). Enter your usual online banking credentials (username and password) to log in. This step ensures that the payment process is secure and that only you can authorize the transaction.
  1. Review and approve the payment: After logging in, you'll see the payment details, including the amount and the recipient. Review these details to ensure everything is correct. If everything looks good, you can authorize the payment by selecting the bank account you want to pay from, and click “Pay”. This may involve entering a one-time password (OTP) or using an additional form of authentication provided by your bank.
  1. Secure bank authentication: After selecting “Pay”, your bank will then verify and approve the payment, and the money is transferred directly from your bank account to the merchant’s account.  
  1. Payment confirmation: Payment is confirmed and you’ll be re-directed back to the merchant, or you can choose to create an account with Neonomics for a faster checkout experience next time. By connecting your bank account with Neonomics, you can skip the initial step of logging into your bank at the beginning of the payment process. Instead, you’ll directly review and approve the payment, and then select the bank account you want to use for the payment.

What makes pay by bank safer than paying with cards?

We assume you bank your money with your chosen bank because you trust them. Yet, you involve an intermediary agent when paying online — such as debit or credit card. When you pay with direct bank payments, you pay directly from your bank account under the protection of your bank’s security also with something called Strong Customer Authentication (SCA).  They make sure it is YOU who is really making the transaction, and what kind of data and information can be shared with the third-party providers, and for how long. These third-party payment providers, like Neonomics, are licensed Payment Institutions and vetted by the banks’ API in real-time when you make payment, and use the banks own security systems.

With pay by bank, you don't have to enter any card details, therefore eliminating the risk of this information being stolen or misused. When you select pay by bank in a checkout, you pay directly from your bank account under the protection of your bank’s security, in which many banks require a second form of payment authentication called Strong Customer Authentication (SCA) - or widely known as BankID. This adds an extra layer of protection in the payment process, making sure it is you who is really making the transaction. The immediate transfer of funds from your bank account to the seller further therefore reduces the risk of interception or fraud, making "Pay by bank" a reliable and straightforward payment option for you.

  • Secure Customer Authentication: You log in to your bank's secure website or app using your existing banking credentials, which means you benefit from your bank's strong security measures.
  • No Card Details: Since you don't enter your card information, there's no risk of your card details being stolen or misused.
  • Two-Factor Authentication: Many banks require a second form of verification, such as a one-time password (OTP), adding an extra layer of security.
  • Immediate Transfer: The funds are transferred directly from your bank to the merchant, reducing the risk of interception or fraud.

In conclusion, pay by bank provides a secure and efficient alternative to traditional payment methods. By utilizing your bank's security and authentication systems, it reduces the risks associated with card payments and third-party involvement. This method not only enhances safety but also offers a streamlined and reliable payment experience, making it a smart choice for online transactions.

Learn more:

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What makes pay by bank safe? A guide

If you have ever come across “Direct bank payment” or “pay by bank” in an online checkout, chances are you are wondering: what is it, why would you choose pay by bank in a payment flow, and how can you ensure your financial data is protected? We’re here to answer those questions and help you understand that better, so let’s dive in.

What is pay by bank?
Pay by bank, also known as Account-to-Account (A2A) payments, is a direct bank payment option in an online checkout process that enables you to pay for goods and services directly with your bank account, eliminating the need for a credit or debit card. This method is typically more secure than a card payment, because it uses your bank's security and authentication systems and eliminates the need to enter card details, while also bypassing third-party providers to process a payment – which means your financial information isn’t bouncing around between a bunch of third parties.  


How does pay by bank work?
Here is a quick overview how it works as a first-time user:

  1. Select "pay by bank" at checkout: When you're ready to pay for your online purchase, you'll see various payment options at checkout. Choose the "Pay by Bank" option from the list.
  1. Choose your bank: You'll be presented with a list of participating banks. Select your bank from this list to proceed with the payment.
  1. Secure login to your bank: Once you select your bank, you'll be redirected to your bank's secure login window to complete a Strong Customer Authentication (SCA). Enter your usual online banking credentials (username and password) to log in. This step ensures that the payment process is secure and that only you can authorize the transaction.
  1. Review and approve the payment: After logging in, you'll see the payment details, including the amount and the recipient. Review these details to ensure everything is correct. If everything looks good, you can authorize the payment by selecting the bank account you want to pay from, and click “Pay”. This may involve entering a one-time password (OTP) or using an additional form of authentication provided by your bank.
  1. Secure bank authentication: After selecting “Pay”, your bank will then verify and approve the payment, and the money is transferred directly from your bank account to the merchant’s account.  
  1. Payment confirmation: Payment is confirmed and you’ll be re-directed back to the merchant, or you can choose to create an account with Neonomics for a faster checkout experience next time. By connecting your bank account with Neonomics, you can skip the initial step of logging into your bank at the beginning of the payment process. Instead, you’ll directly review and approve the payment, and then select the bank account you want to use for the payment.

What makes pay by bank safer than paying with cards?

We assume you bank your money with your chosen bank because you trust them. Yet, you involve an intermediary agent when paying online — such as debit or credit card. When you pay with direct bank payments, you pay directly from your bank account under the protection of your bank’s security also with something called Strong Customer Authentication (SCA).  They make sure it is YOU who is really making the transaction, and what kind of data and information can be shared with the third-party providers, and for how long. These third-party payment providers, like Neonomics, are licensed Payment Institutions and vetted by the banks’ API in real-time when you make payment, and use the banks own security systems.

With pay by bank, you don't have to enter any card details, therefore eliminating the risk of this information being stolen or misused. When you select pay by bank in a checkout, you pay directly from your bank account under the protection of your bank’s security, in which many banks require a second form of payment authentication called Strong Customer Authentication (SCA) - or widely known as BankID. This adds an extra layer of protection in the payment process, making sure it is you who is really making the transaction. The immediate transfer of funds from your bank account to the seller further therefore reduces the risk of interception or fraud, making "Pay by bank" a reliable and straightforward payment option for you.

  • Secure Customer Authentication: You log in to your bank's secure website or app using your existing banking credentials, which means you benefit from your bank's strong security measures.
  • No Card Details: Since you don't enter your card information, there's no risk of your card details being stolen or misused.
  • Two-Factor Authentication: Many banks require a second form of verification, such as a one-time password (OTP), adding an extra layer of security.
  • Immediate Transfer: The funds are transferred directly from your bank to the merchant, reducing the risk of interception or fraud.

In conclusion, pay by bank provides a secure and efficient alternative to traditional payment methods. By utilizing your bank's security and authentication systems, it reduces the risks associated with card payments and third-party involvement. This method not only enhances safety but also offers a streamlined and reliable payment experience, making it a smart choice for online transactions.

Learn more:

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Neonomics AS is licensed as a Payment Institution (PI), Payment Initiation Service Provider (PISP) and Account Information Service Provider (AISP), issued by the Norwegian Financial Supervisory Authority (Finanstilsynet) passported across the EU.