Last updated: November 2024

Pay by Bank Express Checkout lets customers pay directly from their bank account at checkout — no PayPal account, no card details, no friction. Here's how it works, what it costs, and why UK merchants are adding it via Fena.

The checkout experience is where buying decisions get reversed

A customer who has decided to buy something can still change their mind at checkout. The more steps between decision and confirmation, the more opportunities for second thoughts, distractions, or friction to intervene. This is the core problem that checkout optimisation exists to solve — and it's the reason Pay by Bank Express Checkout is gaining traction among UK merchants.

Pay by Bank Express Checkout lets customers complete a purchase directly from their bank account, within a single streamlined flow, without needing a PayPal account, a stored card, or any credentials that don't already exist in their banking app. For UK shoppers already accustomed to authenticating through their bank, it's a payment experience that feels familiar and fast.

This guide explains what Pay by Bank Express Checkout is, how it compares to PayPal and card-based express checkout options, what it means for conversion and costs, and how Fena delivers it for Shopify and WooCommerce merchants in the UK.

Quick summary

• Pay by Bank Express Checkout allows customers to pay directly from their bank account at checkout, authenticating through their banking app without creating any additional accounts

• It removes the friction points that cause drop-off at payment: account creation, password recall, card detail entry, and intermediary approval steps

• Compared to PayPal, Pay by Bank eliminates account setup requirements, reduces transaction fees by removing network intermediaries, and gives merchants more visibility and control over the payment process

• Pay by Bank transactions don't go through card networks, which means no chargebacks, lower fees, and faster settlement

• Fena integrates Pay by Bank Express Checkout directly into Shopify and WooCommerce, adding it as a checkout option alongside existing payment methods

• The customer flow takes seconds: select Pay by Bank, authenticate in banking app, return to merchant confirmation page

What Pay by Bank Express Checkout actually is

Pay by Bank Express Checkout is a payment method that connects the checkout directly to the customer's bank account, enabling payment without cards, payment wallets, or third-party accounts. It runs on UK open banking infrastructure — the FCA-regulated framework built on direct bank-to-bank payment rails that the major UK banks are required to support.

At checkout, the customer selects Pay by Bank. They're taken to their banking environment — either their banking app or online banking — where they review and authorise the payment using their existing banking credentials. The authorisation comes back to the merchant's checkout instantly, the order is confirmed, and the customer is returned to the order confirmation page.

The word "express" reflects the actual experience. There's no account to create, no password to remember, no card number to find and enter, and no third-party approval process to wait on. The customer uses the banking relationship they already have to complete the payment.

How the checkout flow compares to PayPal

PayPal has been the dominant express checkout option in UK ecommerce for years, and its familiarity is a genuine asset. But familiarity doesn't mean frictionless — and for merchants evaluating their checkout options honestly, the comparison is worth making carefully.

Account dependency.

PayPal requires the customer to have a PayPal account and to remember their login credentials. For customers who use PayPal regularly, this is a minor inconvenience. For first-time buyers or customers who haven't used PayPal recently, it's a genuine drop-off risk — forgotten passwords, unrecognised email addresses, and account verification steps all happen at the worst possible moment in the purchase journey. Pay by Bank requires no account creation and no credentials beyond what the customer already uses for their bank.

Transaction fees.

PayPal's fee structure reflects the multiple layers of infrastructure involved — PayPal's own margin, plus the underlying card network costs on card-funded PayPal payments. These fees scale with transaction value and compound across volume. Pay by Bank bypasses both PayPal's intermediary layer and the card network, which results in materially lower per-transaction costs — a difference that becomes increasingly significant as order volume grows.

Merchant control.

PayPal's dispute process operates on PayPal's terms, with limited visibility and control for merchants. Outcomes can be unpredictable and the timeline is set by PayPal's internal process rather than the merchant's. Pay by Bank gives merchants direct visibility into every transaction and handles disputes through a direct merchant-customer relationship rather than a third-party intermediary process.

Chargebacks.

Card-funded PayPal payments can generate chargebacks through the card network, adding a layer of dispute risk on top of PayPal's own dispute mechanism. Pay by Bank transactions don't go through card networks, so card chargebacks don't apply.

Settlement speed.

PayPal holds funds in a PayPal balance before allowing withdrawal, adding a step and a timing delay. Pay by Bank via Fena settles directly to the merchant's bank account, same-day or faster.

What Pay by Bank Express Checkout does for conversion

The relationship between checkout friction and cart abandonment is well-documented and consistent: more steps mean more drop-off. Pay by Bank Express Checkout reduces the number of steps for customers who use it, which reduces the opportunity for abandonment.

The specific friction points it removes are meaningful ones. Not needing to create or log into a PayPal account eliminates a barrier that causes genuine abandonment among customers who either don't have one or can't immediately access it. Not needing to find and enter card details removes the physical friction of locating a card and accurately typing sixteen digits on a mobile keyboard. Not needing to wait for any third-party approval removes a psychological pause in the payment flow that gives uncertainty room to grow.

For customers who are already using their banking app daily, authenticating a Pay by Bank payment is a familiar action — it's the same biometric or PIN confirmation they use to check their balance. That familiarity matters. A checkout step that feels like something the customer already does is easier to complete than one that introduces a new interface or credential.

The conversion effect is most pronounced for first-time buyers who don't have a stored card or PayPal account on file, and for mobile users who find card entry particularly friction-heavy. Both of these groups are large and growing in UK ecommerce.

What Pay by Bank Express Checkout does for merchant costs

Every payment method has a cost structure, and the differences compound across transaction volume. Pay by Bank's cost advantage over card payments and PayPal comes from what it removes from the transaction flow.

Card payments carry interchange fees — set by the card networks and passed through by gateways — plus scheme fees, acquirer margin, and gateway charges. These stack on every transaction. PayPal adds its own layer on top of these costs for card-funded payments. Pay by Bank bypasses both the card network layer and the PayPal intermediary layer, settling directly between bank accounts.

The result is a per-transaction fee that is typically significantly lower than equivalent card or PayPal transactions, particularly for higher-value orders where percentage-based fees carry more weight. For merchants running on tight margins or processing meaningful volume, this difference translates directly into improved profitability — savings that can be reinvested in price competitiveness, marketing, or product development rather than absorbed by payment infrastructure costs.

There's also the chargeback cost to consider. Card chargebacks carry a fee of £10 to £25 per case in the UK, plus the operational cost of evidence handling and staff time. Pay by Bank transactions don't generate card chargebacks, which removes this cost category entirely on Pay by Bank volume.

Security and trust at checkout

For customers, Pay by Bank Express Checkout is authenticated directly within their own banking environment using their existing banking credentials — the same biometrics or PIN they use every time they access their account. This is Strong Customer Authentication (SCA) at the source, meeting the UK regulatory standard without requiring any additional verification layer from the merchant.

Crucially, the customer never shares their banking credentials with the merchant or with Fena. The authentication happens inside the bank's own environment, and only a payment confirmation is passed back to the merchant's checkout. There are no credentials to intercept, no card details to store, and no risk of the customer's banking information being exposed through the merchant's systems.

For UK shoppers who are cautious about sharing financial information with unfamiliar merchants — a significant and growing segment — this model is more comfortable than entering card details directly. The trust is with their bank, which they already have. This is a meaningful conversion factor for merchants whose customer base includes first-time buyers who haven't yet established trust with the brand.

How Fena delivers Pay by Bank Express Checkout for UK merchants

Fena integrates Pay by Bank Express Checkout directly into Shopify and WooCommerce as a checkout payment option. The integration works alongside your existing payment methods — cards, wallets, and any other payment options you currently offer — rather than replacing them. Customers choose which method to use at checkout.

For the merchant, the integration provides automated payment confirmation, real-time settlement to your bank account, and full transaction reporting and audit trails. There's no manual reconciliation, no pending transfer window to manage, and no third-party intermediary holding funds before releasing them.

Fena is FCA-authorised to provide open banking payment services in the UK, which means the payment infrastructure operates under UK regulatory oversight. For merchants in categories where compliance and regulated payment processing carry additional weight, this matters.

The setup process is straightforward. Fena's integration is designed for Shopify and WooCommerce merchants to implement without extensive technical work, and the Fena team provides support through the onboarding process.

When Pay by Bank Express Checkout is most effective

Pay by Bank Express Checkout delivers the most value in specific scenarios, and being clear about where it performs best helps merchants deploy it where it actually moves the needle.

It works particularly well for higher-value transactions, where the fee difference from avoiding card network costs is most material and where the trust signal of bank-authenticated payment carries more weight with the customer. It's effective for first-time buyers who don't have stored payment credentials on the merchant's site, removing the need to create PayPal accounts or locate card details. And it's well-suited to UK-majority customer bases, where open banking adoption is high and bank authentication at checkout is increasingly familiar.

It's less likely to be the highest-performing option for fast, impulsive low-value purchases where saved cards or digital wallets offer near-zero friction for returning customers. The right approach for most UK merchants is to offer Pay by Bank alongside cards and wallets, allowing customers to self-select the method that suits them — and capturing the conversion, cost, and chargeback benefits on the proportion who choose it.

Frequently asked questions

What is Pay by Bank Express Checkout?

Pay by Bank Express Checkout is a payment method that lets customers complete a purchase directly from their bank account, without creating a PayPal account or entering card details. The customer selects Pay by Bank at checkout, authenticates the payment within their banking app, and the transaction completes instantly. It runs on UK open banking infrastructure regulated by the FCA.

How is Pay by Bank Express Checkout different from PayPal?

Pay by Bank doesn't require a third-party account — customers use their existing bank credentials, which they already have. It's also structurally cheaper for merchants, as it bypasses both the PayPal intermediary layer and card network fees. Merchants get faster settlement directly to their bank account rather than funds sitting in a PayPal balance. And Pay by Bank transactions don't carry card chargeback risk.

Is Pay by Bank Express Checkout secure?

Yes. Authentication happens within the customer's own banking environment using their existing banking credentials — biometrics, PIN, or bank login. The merchant never sees or stores banking credentials. Only a payment confirmation passes back to the merchant's checkout. This meets UK Strong Customer Authentication (SCA) requirements by design.

Does Pay by Bank reduce cart abandonment?

It can, particularly for customer segments where friction at payment is the primary drop-off cause. Removing the need to create or log into a PayPal account, and eliminating card detail entry, removes meaningful barriers for first-time buyers and mobile shoppers. The overall impact depends on the merchant's customer profile and existing checkout setup.

Is Pay by Bank Express Checkout cheaper than card payments?

Yes, in most cases. By bypassing card network interchange and scheme fees, and removing the intermediary layer that PayPal adds, Pay by Bank typically carries a lower per-transaction cost than card or PayPal processing — particularly for higher-value orders where percentage-based fees are most significant.

How does Fena integrate Pay by Bank with Shopify and WooCommerce?

Fena's Pay by Bank integration connects directly to Shopify and WooCommerce as an additional checkout payment option, working alongside your existing card and wallet methods. Setup is straightforward and doesn't require replacing your current payment infrastructure. Fena provides support through the integration process.

Do chargebacks apply to Pay by Bank Express Checkout transactions?

No. Pay by Bank transactions don't go through card networks, so card chargeback mechanisms don't apply. Disputes are handled directly between merchant and customer without card network involvement, removing the associated fees, timelines, and operational overhead.