Why Pay by Bank Fragmentation Is a Maturity Signal, Not a Market Failure, Says Token.io CEO

Pay by Bank is moving from a niche European alternative to something much closer to mainstream infrastructure, and the recent announcements from Amazon and eBay in the UK are the cleanest proof point in the source. For PSPs, the real story is not whether the category works; it is how many schemes, rules, and integrations they will have to deal with as the market keeps scaling.

1. Token.io CEO Todd Clyde argues that Pay by Bank is “working” and that fragmentation is evidence of adoption, not collapse. In his view, the fact that Amazon and eBay have introduced Pay by Bank in the UK shows the method is beginning to solidify as a mainstream global payment option.
2. What started as a “made in Europe” alternative to card payments is now being positioned as a payment method with faster payments, stronger security, and a simpler user experience. The use cases already include credit card repayments, current account top-ups, and savings account funding, with adoption expected to expand as new schemes emerge.
3. Token.io cites survey data showing that 91% of respondents reported strong merchant demand, while Open Banking Limited estimates a £4.4 billion opportunity. The same estimate breaks down into £331 million from online payments, £40 million from in-store transactions, £110 million from one-off bill payments, and £78 million from recurring billing.
4. On fraud, Open Banking Limited says Pay by Bank is 2.4x safer than payments industry norms. During 2025, approximately one in 6,000 open banking payments were fraudulent, compared with one in 2,500 across the broader payments industry.
5. The catch for PSPs is integration sprawl. Across the UK and Europe, multiple industry-led and regulatory-led Pay by Bank schemes have emerged, each with its own functionality, geographic reach, dispute frameworks, and commercial model. That creates more development work, higher maintenance, and more operational complexity, especially when recurring payment mandates and dispute resolution are not standardized across schemes.

For high-risk operators and their payment providers, the practical takeaway is simple: Pay by Bank is no longer a question of whether merchants will want it. The question is how many schemes a PSP will need to support before the economics start looking less elegant than the pitch deck.