A Pay by Bank Application Programming Interface (API) allows your end users to make payments directly from one bank account to another, bypassing card networks. It’s a great option if you’re looking for a faster and more cost-effective way to facilitate payments for your merchants.

Pay by Bank—also known as open banking payments—is growing in popularity, with a third of 18-29-year-olds using the service weekly in many European countries.

In this guide, we’ll cover:

• What to know about Pay by Bank APIs
• Four questions to ask when choosing a Pay by Bank API
• How Yapily can support you to offer Pay by Bank payments

Prefer to get started with Pay by Bank right away? Speak to an open banking expert at Yapily.

What to know about Pay by Bank APIs

Pay by bank uses APIs to allow users to make transactions directly from their bank account, whether they’re shopping online, topping up a digital wallet, or making other types of payments. It is now one of the top three payment methods in the UK, Netherlands, Finland, Spain, and Germany.

Here’s how Pay by Bank stacks up with traditional card payments:

To offer Pay by Bank to your merchants, you’ll need to work with a payment initiation service provider (PISP), which you might call an open banking payments provider. This is a kind of open banking service provider that’s authorised to enable direct account-to-account payments.

Learn more: Open banking APIs: What you need to know

Four questions to ask when choosing a Pay by Bank API

1. What types of payments does the open banking platform support?

The payment functionality that open banking solutions offer varies depending on your provider.

Most will offer single immediate payments—one-off payments that users can make immediately—as well as scheduled payments.

However, you may want to offer your merchants other types of payments.

For instance:

• Bulk payments can enable merchants to save even more money on transactions, by enabling them to make multiple payments in a single API call, reducing the overhead associated with individual transactions.
• Sweeping variable recurring payments allows users to automate transfers between their own accounts, such as moving money between checking and savings accounts. This is useful for personal finance management and ensuring consistent savings.
• Commercial variable recurring payments (cVRP) is a new payment option giving businesses ongoing payment authorisation from consumers, offering a smarter, more flexible, and cheaper alternative to Direct Debits and card-on-file.

Even if you don’t want to offer your merchants all these payment types right now, working with a provider that supports these payments makes sense. It will make it easier to offer these features in the future without the hassle of switching open banking providers.

2. What markets does the platform cover?

It’s important to consider the coverage of an open banking solution.

Coverage is measured by the proportion of banks and financial institutions that an open banking platform connects to in a specific geographic region. Every open banking platform will have strengths in particular regions. For instance, some platforms will have built more connections in North America, while others will have stronger connectivity in Europe.

You’ll need to choose one that makes sense for your operations, target markets, and long-term strategy. If the platform you choose doesn’t have good coverage in the specific regions you plan to operate in, you’ll have to work with an additional platform that does. This can be costly and complicate your operations.

3. Do you want hosted or white-label solutions?

One significant benefit of Pay by Bank payments is the ease of use for end users. They can make payments through the bank they trust without having to enter any card details or disclose any sensitive information.

Offering a smooth payment experience is crucial for your merchants. Studies show that 88% of end users are prepared to abandon the cart if the payment experience has too much friction.

When choosing an open banking platform, look for one that offers both hosted solutions and white-label payment flows. A hosted solution is a ready-to-go option that allows businesses to get started quickly without needing to build their own interface from scratch. This can be especially useful for SMEs or large accounts that need to get started with a Pay by Bank solution quickly.

A white-label option provides the option to create a fully branded and customised user experience. With both options available, businesses also have the option to launch quickly with a hosted solution while they develop their own tailored version in parallel.

4. Do you want to support open banking data services too?

While your priority right now may be to initiate payments, it is important to consider supporting open banking data and how it might help your merchants in the future.

Open banking data services enable authorised third parties to access transaction data, bank balances, account ownership details, and much more. It can be useful if you’re interested in supporting feature like account aggregation, offering Know Your Customer (KYC) and Know Your Business (KYB) checks, assessing creditworthiness, and many more use cases. Open banking data is a rapidly growing area with huge potential to change payments and financial services for the better.

For instance, a PSP serving ecommerce merchants might want to offer account aggregation features to provide their merchants with insights into customer spending patterns, enabling them to offer personalised promotions or loyalty rewards.

To offer these kinds of data services to merchants, you’ll need to work with an open banking platform that is an account information service provider (AISP) as well as a PISP. AISPs are authorised to access this data, while PISPs are not.

How Yapily can enable you to offer Pay by Bank payments

At Yapily we’re an open banking platform that connects with nearly 2,000 banks across Europe and the UK. But, beyond that, we’re a payment infrastructure company designed to empower PSPs and other payment institutions to innovate and manage seamless, secure, and efficient payments at scale.

Unlike many other solutions, Yapily delivers enterprise-grade infrastructure tailored to the complex needs of businesses, helping PSPs create standout offerings for their merchants. Whether you’re looking to streamline payment processing, expand across markets, or offer advanced features like variable recurring payments, Yapily is built to grow with you.

Here are three reasons to use Yapily for your Pay by Bank API:

1. Extensive coverage across Europe for Pay by Bank and data services

Choosing an open banking solution with limited coverage can make your platform less competitive to ambitious merchants aiming to expand. To support their growth and win their business, it’s essential to offer a solution with broad, reliable coverage that meets their needs across multiple regions.

With Yapily, you’ll get broad coverage across Europe. We operate in 19 countries, including key markets such as Germany, the Netherlands, France, and the UK. Across the continent, we connect with nearly 2,000 banks, meaning that you’ll be able to scale effortlessly wherever you want to operate.

Along with broad coverage, we also offer a wide variety of different payment types for personal and business accounts (region dependent):

• Single Pay by Bank payments, either immediate or scheduled
• Bulk payments (UK only)
• Sweeping variable recurring payments
• Commercial variable recurring payments (cVRP) (UK only)

While Pay by Bank is typically associated with consumer payments, it is also an effective payment option for business payments. At Yapily, we’re one of the few open banking providers that also supports both open banking payments for consumers and business accounts.

Additionally, one of our key features is that we are an AISP as well as PISP, meaning we also offer open banking data products, including data enrichment. That means you can support merchants who want to offer account aggregation features or KYC checks.

2. Offer your merchants the choice of whitelabel or hosted pages

The experience of Pay by Bank payments depends on seamless payment flows.

Because we’re a payment infrastructure platform rather than just a simple overlay solution, you have full control over the payment experience you want to offer your merchants.

We offer:

• White label infrastructure for a customisable experience. With Yapily’s white label solutions, you can build the UX from scratch to suit your customers’ specific needs. We’ll handle the complex technological aspects on which payments depend, but you’ll have the freedom to configure payment pages to suit your merchants.

• Yapily’s Hosted Pages, for fast deployment. If you have merchants asking for alternative payment options right now, building a solution using the white label capabilities might take too long — potentially leading to lost customers. To meet this demand, you can use our out-of-the-box solution called Hosted Pages for Pay by Bank, enabling you to bring your industry-leading Pay by Bank solution to market quickly.

Whichever you choose, you’ll benefit from our robust infrastructure, so you can offer a reliable experience to all of your customers.

3. Trust our rigorously-tested, scalable infrastructure

One of the key challenges for PSPs using open banking APIs is ensuring reliability at scale. At Yapily, we’ve built our API to be robust and resilient, capable of handling high volumes of transactions without compromising performance. Whether you’re an early-stage start-up or a large enterprise, our infrastructure is designed to support businesses of all sizes and at all stages of growth.

We rigorously test our API with real bank accounts—both consumer and business—to ensure seamless performance in real-world conditions. Our stress testing goes beyond industry standards, validating our ability to process high transaction volumes with consistency and efficiency.

Security is at the core of our platform. Our API is ISO 27001 certified, ensuring enterprise-grade encryption and protection for all your sensitive data. Plus, we’re compliant with GDPR and PSD2, maintaining the highest standards of data security and privacy.

How Yapily helped Crezco offer Pay by Bank to over 5000 SMEs

Across Europe, SMEs represent 99% of businesses, yet they remain underserved when it comes to simple, cost-effective payment solutions. Crezco, a London-based payment provider, is tackling this challenge head-on. By leveraging Yapily’s Pay by Bank API, Crezco empowers over 5,000 SMEs to overcome key issues like late payments, high fees, and time-consuming reconciliation.

According to Ralph Rogge, Co-Founder and CEO at Crezco, “Open banking allows Crezco to address these pain points all at once, providing SMEs with the tools they need to thrive.”

Crezco uses Yapily to empower its merchants to offer instant, cost-efficient Pay by Bank payments that bypass card networks, automate reconciliation with accounting integrations, and enable faster onboarding through Yapily Validate.

Since partnering with Yapily, Crezco has achieved impressive results: reducing debtor days by 27%, saving customers £1,000 on fees per 25 invoices, and increasing account-to-account payments by 71%. With a net promoter score of +76, Crezco continues to set the standard for smarter SME payment solutions.

Read the full case study: How Crezco + Yapily optimise payments for 5,000+ businesses

Reach out to Yapily to get started with Pay by Bank

In this guide, we’ve shared some of the key features you need to look out for when choosing an open banking platform for Pay by Bank. Coverage, customer experience, and the payment and data services on offer are all critical considerations.

At Yapily, we offer both payment and data services via our open banking infrastructure platform. Get in touch to find out more.