European payments company ZEN.COM has switched on pay-by-bank payments through Mastercard Open Finance in nine countries: Germany, Austria, Spain, Belgium, the Netherlands, Italy, Portugal, Ireland and Lithuania. The feature covers merchant payment acceptance and top-ups of ZEN.COM's digital wallet. Customers can pay from their bank account alongside cards and other methods. The expansion was announced on 28 October.
What it means: Payments made directly from a bank account, built on PSD2 open banking, are gaining ground in Europe as a cheaper alternative to cards for merchants. The customer approves the payment in their banking app and the money moves, often instantly, without card network fees. What is interesting here is that Mastercard itself, one of the big card networks, provides the infrastructure, showing that networks prefer to take part in the shift rather than lose out to it. Greece is not among the nine countries, but the Greek market already has IRIS for instant payments and merchants looking for ways to cut acceptance costs. For Greek online shops selling into these markets, pay-by-bank can reduce fees and payment disputes, although consumers have less refund protection than with cards. The coming overhaul of the payments framework through PSD3 and the PSR regulation is expected to make such services more reliable, with better performing bank interfaces.
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