Episode 542: Pay by Bank Poised for Growth in the U.S.

May 2, 2024

Joining the discussion are Eric Sager, COO of Plaid, who steers business strategy in digital payments, and Trevor Neece, Adyen’s Senior VP, who brings two decades of e-commerce expertise. They delve into the surging popularity of 'pay by bank' in the U.S., exploring how it mirrors successful models from Brazil and India. The conversation highlights the urgent need for merchants to adapt to shifting consumer preferences, the cost advantages for businesses, and how AI might further revolutionize payment processes. Will 'pay by bank' become the norm?

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INSIGHT

Emerging Markets Lead Real-Time Payments

Emerging markets like India and Brazil lead payments with real-time rails and wallets, reshaping global trends.
Their regulator-driven, bank-led models create rapid adoption that other markets can learn from.

INSIGHT

Regulation Accelerated National Adoption

Central bank coordination and mandated integration in apps accelerated Pix and UPI adoption in Brazil and India.
Those policies solved for cash dependency and cheaply scaled national payment networks.

ADVICE

Add Pay-By-Bank To Your Payment Mix

Integrate pay-by-bank as a digital evolution from cash and cards to meet consumer demand for debit-like options.
Offer it alongside existing methods to capture younger customers and subscriptions now preferring bank payments.

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In This Episode

Pay by bank is gaining momentum in the U.S., it’s a natural evolution of how we pay with funds from our bank accounts. What will it take to get more people to use it and what about readiness for different use cases? Listen as host Brett King, Eric Sager, Plaid’s COO and Trevor Nies, Adyen’s SVP, Global Head of Digital discuss the state of pay by bank, what is driving it in the U.S., the value it delivers, the next segments to adopt, and how key challenges are being overcome to make it good for consumers and for businesses. Will we start seeing pay-by-bank in everyday e-commerce experiences? Listen to our latest episode of Breaking Banks to find out!

Read the entire transcript here.

Podcast Content:

Chapter 1: [00:00] Introduction and Global Payment Trends

The hosts introduce the episode and explore the growing momentum of pay-by-bank systems worldwide, focusing on their adoption in emerging markets like Brazil and India.

Chapter 2: [05:20] Meet the Guests and U.S. Market Overview

Eric Sager from Plaid and Trevor Neece from Adyen discuss their roles and share insights into the complexities and opportunities in the U.S. payments ecosystem.

Chapter 3: [12:40] Lessons from Emerging Markets

Exploration of real-time payments systems such as PIX in Brazil and UPI in India. Insights into how these systems could shape the future of payments in the U.S. and Europe.

Chapter 4: [22:15] The Growing Appeal of Pay by Bank

Deep dive into the benefits of pay-by-bank for consumers and merchants, including lower costs, reduced churn, and access to underserved populations.

Chapter 5: [30:50] The Partnership Between Plaid and Adyen

Details on the strategic collaboration between Plaid and Adyen, its objectives, and how it simplifies merchant integration while offering value to consumers.

Chapter 6: [39:30] Overcoming Adoption Barriers

Discussion on the challenges of implementing pay-by-bank in the U.S., including consumer trust, branding, and incentives, and how to drive adoption across generations.

Chapter 7: [48:10] AI and the Future of Payments

Speculation on how AI will transform payments, from contextual credit to automated personal finance management, and its potential integration with pay-by-bank systems.

Chapter 8: [55:50] Wrapping Up and Future Outlook

Guests reflect on the potential for pay-by-bank to reshape the payments landscape, their plans for the partnership, and their excitement for the future.