What makes pay by bank safe? A guide
If you have ever come across “direct bank payment” or “pay by bank” in an online checkout, chances are you are wondering: what is it, why would you choose it when making a payment, and how can you ensure it is a safe way to pay? We’re here to answer those questions and help you understand that better, so let’s dive in.
What is pay by bank?
Pay by bank, also known as Account-to-Account (A2A) payments, is a payment method in an online checkout process that enables you to pay directly with your bank account. This method is typically more secure than a card payment because it uses your bank's own security and authentication systems, and eliminates the need to enter card details. Additionally, it bypasses third-party providers to process the payment, which means your financial information isn’t bouncing around between a bunch of third parties.
How does pay by bank work?
Here is a quick overview of how it works as a first-time user:
- Select "pay by bank" at checkout: When you're ready to pay for your invoice or online purchase, you'll see various payment options at checkout. Choose the "Pay by Bank" option from the list.
- Choose your bank: You'll be presented with a list of participating banks. Select your bank from this list to proceed with the payment.
- Secure login to your bank: Once you select your bank, you'll be redirected to your bank's secure login window to complete a Strong Customer Authentication (SCA). Enter your usual online banking credentials (username and password) to log in. This step ensures that the payment process is secure and that only you can authorize the transaction.
- Review and approve the payment: After logging in, you'll see the payment details, including the amount and the recipient. Review these details to ensure everything is correct. If everything looks good, you can authorize the payment by selecting the bank account you want to pay from, and click “Pay”. This may involve entering a one-time password (OTP) or using an additional form of authentication provided by your bank.
- Secure bank authentication: After selecting “Pay”, your bank will then verify and approve the payment, and the money is transferred directly from your bank account to the merchant’s account.
- Payment confirmation: Payment is confirmed and you’ll be re-directed back to the merchant, or you can choose to create an account with Neonomics for a faster payment experience next time! By connecting your bank account with Neonomics, you can skip the initial step of logging into your bank at the beginning of the payment process. Instead, you’ll directly review and approve the payment, and then select the bank account you want to use for the payment.
What makes pay by bank safer than paying with cards?
We assume you bank your money with your chosen bank because you trust them. Yet, you involve an intermediary agent when paying online — such as debit or credit card. With pay by bank payments, you pay directly from your bank account under your bank’s security, using something called Strong Customer Authentication (SCA). This ensures it’s really you making the transaction and controls what data can be shared with third-party providers, and for how long. Licensed Payment Institutions like Neonomics are vetted in real-time by the banks' API and use the banks' own security systems.
When you choose "pay by bank," there's no need to enter card details, reducing the risk of this information being stolen or misused. At checkout, "pay by bank" leverages your bank’s security, often requiring a second form of authentication (SCA), widely known as BankID. This adds an extra layer of protection, making sure it’s really you making the transaction. The immediate transfer of funds from your bank account to the seller further reduces the risk of interception or fraud, making "pay by bank" a reliable and straightforward payment option.
Key benefits of pay by bank:
- Strong Customer Authentication: Log in to your bank's secure website or app with your existing banking credentials, benefiting from your bank's strong security measures.
- No Card Details Required: Without entering your card information, there's no risk of your card details being stolen or misused.
- Direct Bank Transfer: Funds transfer directly from your bank to the merchant, reducing the risk of fraud.
To sum it up, pay by bank is a safe and efficient alternative to using cards. Paying directly from your bank account cuts out the middlemen and reduces risks. It's a secure, simple, and reliable way to handle online payments, making it a great choice for your transactions.
Learn more:
- You’re in for smooth ride with Biometric login
- What are Account-to-Account payments?
- A2A is on the rise in the Nordics
