Pay by Bank vs Card Payments: Which Should Your Business Offer?
Who this is for: US online businesses that accept cards today and are deciding whether to add pay by bank.
Cards are what most customers reach for at checkout. Pay by bank lets them pay straight from their bank account instead, usually at a lower cost to the merchant. The two aren't rivals: most businesses that add pay by bank keep cards. Here is how they compare and when adding pay by bank makes sense.
How do pay by bank and card payments compare?
| Pay by bank | Cards | |
|---|---|---|
| How the customer pays | Connects their bank account and approves the payment. | Types a card number, or uses a saved card or a wallet like Apple Pay. |
| Cost to accept | Usually lower, especially on larger orders. | Usually a percentage of each payment, so it grows with the order size. |
| Card details to protect | None. There is no card number to store or to expire. | Card numbers must be protected, and saved cards expire and get replaced. |
| Customer familiarity | Growing, but some customers haven't used it yet. | Almost every online shopper knows how to pay by card. |
| Disputes and returns | No card chargeback process, but a bank payment can still be returned, for example when the customer tells their bank they didn't authorize it. | Customers can dispute through their card issuer, and the merchant answers with evidence. |
| Payouts back to customers | The same bank account can receive payouts and withdrawals. | Payouts to cards are possible but depend on the card and the provider. |
Is pay by bank cheaper than cards?
Usually, yes. Card fees are mostly a percentage of each payment, so a larger order means a larger fee. Bank payments usually cost less to accept, so the savings are biggest on larger orders. For a business with small, frequent orders the difference is smaller, and the main reason to add pay by bank is giving customers another way to pay.
Which businesses benefit most from pay by bank?
- Larger order values, where card fees add up fastest.
- Platforms and marketplaces that collect from customers and pay money back out to their bank accounts.
- Customers who prefer not to use a card and would rather pay from their bank account.
When are cards the better choice?
Cards are familiar to almost every shopper, they work for customers outside the US, and wallets like Apple Pay and Google Pay make them fast on a phone. For a first-time buyer in a hurry, a card or a wallet is often the quickest path. That is why pay by bank works best next to cards, not instead of them.
Can you offer both at checkout?
Yes, and most businesses should. Show pay by bank next to cards and wallets, and let each customer pick. The practical question is integration: adding pay by bank through a separate provider means a second checkout flow, a second dashboard and a second set of reports. Read payment gateway vs payment processor vs payment orchestration for how one integration can cover several payment methods.
How does pay by bank work with Soap?
Soap adds pay by bank for US customers to the same hosted checkout you use for cards, Apple Pay and Google Pay, so there is no separate integration to build. Payments and payouts show up in one dashboard. Soap also sends payouts to US bank accounts, in real time where the receiving bank supports it and by same-day ACH where it doesn't. Our instant payouts guide explains the payout options.
Frequently asked questions
What is the difference between pay by bank and card payments?
With pay by bank, the customer connects their bank account and approves the payment, and the money moves from their account to the merchant over bank payment networks. With a card payment, the money moves over the card networks, and the customer's card issuer pays the merchant.
Is pay by bank cheaper than accepting cards?
Bank payments usually cost less to accept than card payments, and the gap grows with the order size, because card fees are usually a percentage of each payment.
Which businesses benefit most from pay by bank?
Businesses with larger order values, platforms that both collect from customers and pay out to their bank accounts, and businesses whose customers prefer not to use a card.
Should I replace cards with pay by bank?
No. Most businesses offer pay by bank next to cards and wallets, so each customer can choose. Removing cards would turn away customers who expect to pay by card.
Does Soap support pay by bank?
Yes. Soap adds pay by bank for US customers to the same hosted checkout as cards, Apple Pay and Google Pay, and sends payouts to US bank accounts, in real time where the receiving bank supports it and by same-day ACH where it doesn't.
Talk to the Soap team
Thinking about adding pay by bank? Talk to the Soap team.