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The retail giant’s launch of Pay by Bank in the UK is a significant step in the evolution of open banking from regulatory concept to mainstream retail infrastructure.
Pay by Bank, which went live last week, allows UK customers to pay for Amazon purchases directly from their bank account, without using a card.
Customers select their bank at checkout and are then redirected to their mobile banking app, where they can authorise the transaction using biometric authentication or PIN code.
By placing an order using Pay by Bank, customers authorise open banking API provider TrueLayer to process the payment.
Francesco Simoneschi, founder of TrueLayer, described the launch of Pay by Bank as “one of those moments that changes an industry”.
“This is a historic day for fintech and for e-commerce merchants, and we're proud to support one of the world's most demanding commerce environments with Pay by Bank at true mass-market scale,” he said.
“Operating at Amazon's scale demands resilient infrastructure, deep bank connectivity, and consistently high performance.
“Anyone who has ever worked in payments will know this wasn't just the flick of a switch – this has been literally years of building and perfecting.”
A milestone for the National Payments Vision
From a regulatory perspective, the launch sits squarely within the UK’s post-Brexit payments reform agenda.
Under the Labour government’s 2024 National Payments Vision (NPV), the rollout of open banking-enabled account-to-account (A2A) payments for e-commerce was designated a “strategic short- to medium-term priority”.
“There is significant opportunity to further develop A2A payments in the UK – enabling consumers to pay digitally for goods and services in shops and online, without using a card,” says the NPV.
“This would provide greater choice to consumers and merchants in how they make and receive payments, which in turn is likely to spur innovation and downward competitive pressure on the cost of payments.
“It is the government’s ambition, therefore, that seamless A2A payments are developed as a ubiquitous payment method.”
With a total UK revenue of £29bn in 2024, Amazon is by a huge margin the largest e-commerce platform in the UK. For perspective, its next closest rival, eBay, reported a total revenue of £1.16bn in the UK in 2024.
Amazon’s scale and its decision to embed open banking-powered payments within its core checkout journey offers clear evidence that the push towards “ubiquity” for A2A payments has begun.
However, whether that ubiquity translates into consumer adoption is another question, and one that will be answered in the years ahead.
Amazon’s push for payments sovereignty
The launch of Pay by Bank also aligns with UK policy objectives to diversify payment rails beyond international card schemes and stimulate domestic infrastructure.
In Amazon’s case, the issue of payments sovereignty is particularly relevant, in light of the retailer’s proposed ban on UK-issued Visa credit cards.
In January 2022, Amazon was only 48 hours away from imposing the ban, citing Visa’s “continued high cost of payments” as the point of contention.
“The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers,” Amazon said in an email to customers at the time.
“These costs should be going down over time with technological advancements, but instead they continue to stay high or even rise.
“As a result, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January 2022.”
In the end, following last-minute negotiations with the card giant, a new global agreement between Amazon and Visa was finalised and the ban was scrapped.
The dispute followed Visa’s post-Brexit decision to raise interchange fees on UK–EEA cross-border consumer transactions from 0.3% to 1.5% for credit cards and from 0.2% to 1.15% for debit cards, after such transactions fell outside the EU Interchange Fee Regulation caps.
Amazon’s subsequent commitment to Pay by Bank speaks to the potential cost savings of bypassing international card schemes.
Though Amazon has declined to comment publicly on fee differentials, it is reasonable to infer that A2A payments offer a structurally different cost profile.
For policymakers concerned with cost and competition in retail payments, this is likely to represent a meaningful rebalancing of negotiating power between merchants, banking partners and global card schemes.
Consumer protection issues
The UK media has focused heavily on the consumer protection implications of Pay by Bank, particularly the absence of chargeback rights that are available to consumers under card scheme rules.
Instead, Amazon offers Pay by Bank users its standard return policies, its A-to-Z Guarantee – which covers transactions with third-party Marketplace sellers – and the statutory protections of the Payment Services Regulations.
If a refund is requested under Amazon’s standard return policies, the funds are returned to the customer’s bank account “within minutes” after the return is received and confirmed.
If a refund is requested under the A-to-Z Guarantee – for example, due to faulty, damaged or undelivered goods – the funds are also returned to the consumer’s bank account “within minutes” once the refund is processed.
In addition, Amazon notes that all Pay by Bank customers will benefit from protections under the Payment Services Regulations for up to 13 months.
For compliance professionals, a more interesting question may be how these overlapping layers of protection are communicated, and whether consumer expectations, shaped by decades of card usage, evolve in line with the new model.
As such, consumer protection may prove to be the most closely scrutinised aspect of Pay by Bank and similar A2A payment models as adoption scales.
Nonetheless, it is clear that Pay by Bank offers not just an alternative payment method, but a bellwether for the next phase of the UK’s payments transformation.
