Over 41% of Consumers Interested In Pay By Bank Despite Security Fears

Pay by bank transfer is an increasingly popular payment method for consumers, yet it also carries security concerns as it involves sharing banking details.

We explore this and related issues in

“New Payment Options: Building Stronger Customer Ties With Pay by Bank Transfer,” a PYMNTS and Nuvei collaboration, gauged more than 2,000 consumers’ concerns with making recurring bill payments and online transactions and the features that would encourage them to use online bank transfers.

As to its popularity as a payment method, the study noted that for bill pay, bank transfers are third only to credit and debit cards to pay recurring bills. But safety concerns are what must be overcome for pay by bank to truly scale as a payment method.

The study found that some aspects of pay by bank are causing unwanted friction for consumers. Nineteen percent of consumers who paid for their most recent online purchase using an online bank transfer reported that they encountered some difficulty when initiating a dispute with a merchant. Another 19% reported that online bank transfers “are difficult to use across multiple devices.” Importantly, 16% of consumers cited security fears.

 “Consumers are concerned about the security of online bank transfers as a payment method, but it is unclear if experience using this method heightens or eases these concerns,” per the study, with 36% of consumers who have not used online bank transfers in the past year apprehensive about security.

For those who used this payment method in the past year, “the share of those concerned dips — but just to 34%. Our data also [found] that consumers who used online bank transfers for their most recent transactions [were] somewhat more sensitive to issues such as the risk of fraud and their ability to trust the merchant. Moreover, consumers who have paid via online bank transfer in the past [were] just as concerned as other consumers about the difficulty of resolving security problems that might arise.”

While pay by bank is gaining consumer confidence, the study found that 73% of consumers “concerned about security issues with online bank transfers in the abstract [cited] the risk of fraud as an issue that concerns them, but 75% of consumers who used online bank transfers in their most recent in-person payment [said] the risk of fraud also concerns them.”