Plaid Introduces Pay-by-Bank Solution for Recurring Payments

Plaid has introduced a new product designed to help businesses allow their customers to pay bills directly from a bank account.

The new Plaid Pay by Bank for Bill Pay is designed to provide consumers with a more seamless, cost-effective and secure way to pay bills, and to help businesses benefit from lower processing costs and fewer returns for all types of recurring payments, the company said in a draft of a Tuesday (Oct. 8) blog post emailed to PYMNTS.

“Every company is looking to grow and lower costs,” Brian Dammeir, general manager and head of payments at Plaid, said in the post. “Getting more customers to pay directly with their bank account for more types of payments is a clear way to do both. In fact, when we combine a great user experience with optimal verification and intelligent risk assessment, Pay by Bank for Bill Pay can deliver a more reliable experience than cards.”

This solution’s embedded experience increases adoption by allowing users to select or search for their bank without leaving the payment experience and by letting remembered users within the Plaid Network receive one-click experiences, according to the post.

Pay by Bank for Bill Pay also lowers returns by decreasing insufficient funds, by optimizing for approvals during the payment flow and by providing insights about when to retry failed payments, the post said.

It also helps prevent payment fraud by detecting abnormal transaction patterns and flagging potential fraud in real time, per the post.

“Pay by Bank for Bill Pay is available and already in use by early customers in telecommunications, property management, insurance, automotive and more,” Dammeir said in the post. For example, Domuso, a digital payment platform transforming the way the multifamily industry collects and manages rent, has integrated the new bill pay experience into its digital payments platform that offers certified payment options, including ACH.

In the United States, 36% of consumers use pay by bank, also known as account-to-account (A2A) payments, according to the PYMNTS Intelligence and AWS collaboration, “Tracking the Digital Payments Takeover: Consumer Familiarity Controls Account-to-Account Payment Growth.”

The report found that consumers most often cite convenience, ease of use and fast availability of funds as reasons for using A2A payments.