Open Banking payments: account-to-account pay-ins with instant settlement and no chargebacks
An Open Banking payment is a bank transfer the payer authorises in their banking app, started by a licensed payment initiation provider: the checkout shows the banks, the payer picks one and confirms, and the money arrives on the instant rail of the country, Faster Payments in the UK or SEPA Instant in the euro area. No card, no chargeback, a flat fee. Through Tranzify a PSP enables the providers from the catalogue and cascades pay-by-bank with cards.
How a pay-by-bank payment goes through
- The checkout offers pay-by-bank and lists the payer’s banks.
- The payer picks a bank, is redirected to its app, sees the amount and the payee and confirms with the bank’s authentication.
- The provider initiates the transfer and reports the confirmation; the money moves on the instant rail.
- Tranzify writes the result and calls the merchant’s webhook; the payer returns to the merchant.
Why it matters for payment businesses
- No chargebacks: the payer authorised the transfer at the bank; disputes go through the bank’s process, not the schemes'.
- Instant settlement on Faster Payments and SEPA Instant: the merchant’s balance is credited in seconds.
- Flat fees instead of a percentage, which changes the economics for large amounts.
- Approval rates that do not depend on an acquirer’s risk rules; a cascade to cards covers the payers whose bank is not supported.
- No card data: nothing to store, no PCI scope for the method, no 3-D Secure to pass.
The economics, compared
| Cards | Open Banking | |
|---|---|---|
| Fee | A percentage with interchange and scheme fees | A flat fee per transfer, sometimes a small percentage above a threshold |
| Settlement | One to several days | Seconds to minutes on instant rails |
| Chargebacks | Yes, with fees and ratio programmes | None; refunds at the merchant’s decision |
| Limits | The card’s | The account’s and the bank’s transfer limit |
| Authentication | 3-D Secure | The bank’s own, in the app |
| Recurring | Tokens and merchant-initiated charges | Variable recurring payments in the UK, live for transfers between the payer’s own accounts and piloted for merchants; PayTo in Australia; per provider elsewhere |
Providers in the catalogue
TrueLayer, Yapily, Volt, Tink and Token.io cover the UK and the main EU markets with GBP and EUR settlement; the provider pages list the countries and the operations of each. A client enables them with its own accounts and writes the routing rules; the integrations are the platform’s. Two providers in one route group give a cascade inside the method: a bank unsupported by one provider is often supported by the other.
Getting the conversion right
The bank list is where payers decide: show the banks of the payer’s country only, the payer’s likely bank first, and the search box for the rest; keep the amount and the payee visible; return the payer to the checkout after the bank’s confirmation with the result already there; and offer a card on the same page when the bank is down. The checkout does all of that, and the journal shows at which step a payment stopped, so the client sees whether a drop happens on the page or in a bank’s app.
Open Banking by region
The UK and the EU are the mature markets; Brazil’s Open Finance adds account payments next to PIX; Saudi Arabia and Bahrain run programmes under their central banks; Australia’s PayTo and the US aggregators follow their own paths. The Open Banking product page and the country pages describe where the clients’ merchants can use it today, with the providers in the catalogue for each market.
Updated: 2026-11-08