Trustly and Episode Six Partner on US Pay-by-Bank Adoption
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Trustly and Episode Six Partner to Boost Pay-by-Bank Adoption in the US
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The partnership aims to simplify pay-by-bank integration for US merchants by leveraging existing card networks, perhaps lowering costs and accelerating growth.
(Published September 12, 2024)
Pay-by-bank, also known as account-to-account (A2A) payments, is a rapidly growing payment method globally, offering a secure and cost-effective alternative to traditional card payments. Though, its adoption in the United States has lagged behind other regions. A new partnership between Trustly, a leading global provider of pay-by-bank solutions, and Episode Six, a company specializing in enterprise-grade card issuing and ledger infrastructure, seeks to change that.
What is Pay-by-Bank and Why is it Gaining Popularity?
Pay-by-bank allows consumers to pay directly from their bank accounts, bypassing traditional card networks. This offers several advantages:
Lower Costs: Typically, pay-by-bank transactions have lower fees compared to credit and debit card processing.
Increased Security: Direct bank transfers are generally considered more secure than sharing card details.
Faster Settlement: Funds often settle faster with pay-by-bank, improving cash flow for merchants.
Reduced Fraud: The direct connection to the bank account can definitely help minimize fraudulent transactions.
Despite these benefits,US merchants have been hesitant to adopt pay-by-bank due to perceived complexity and the need for notable infrastructure changes. This is where the Trustly-Episode Six partnership comes into play.
How the Partnership Works: Leveraging Existing Infrastructure
The core of the collaboration lies in Episode six’s issuer processing technology, which will power Trustly’s “card rail plugin integration.” This innovative approach allows merchants to accept pay-by-bank transactions through their existing card networks.
Essentially, the system translates pay-by-bank requests into card-based transactions, enabling merchants to utilize their current payment processing infrastructure without major overhauls. This significantly reduces the barriers to entry and simplifies the integration process.According to a press release issued on tuesday, September 9, Trustly chose Episode Six for its “modern, cloud-native and resilient platform,” and its ability to support future payment innovations.
Benefits for US merchants
This partnership is expected to deliver several key benefits to US retail merchants:
Simplified Integration: No need to overhaul existing payment systems.
Reduced Costs: Lower transaction fees compared to traditional card payments.
Faster Settlement: Improved cash flow with quicker fund availability.
Minimized Fraud: Enhanced security features associated with direct bank transfers.
“Merchants don’t want complexity. They want faster, safer payments that simply work,” said Brian Muse-McKenney in the press release. This sentiment underscores the core value proposition of the partnership: making pay-by-bank accessible and easy to implement for US businesses.
The State of Pay-by-Bank in the US: A Lagging Indicator
While pay-by-bank is experiencing rapid growth in Europe and other parts of the world, its adoption in the US has been slower. Several factors contribute to this:
* Dominance of Credit Cards: The US has a deeply ingrained credit card culture