Article
Is Pay by Bank safe? The regulation behind it
It's the first question every committee asks, and it deserves a straight answer rather than reassurance. Pay by Bank is not a workaround — it's infrastructure the UK's competition regulator ordered the banks to build.
Where it came from
In 2017 the Competition and Markets Authority ordered the nine largest UK banks and building societies — the "CMA9" — to open up their payment infrastructure through standardised, secure interfaces. Open banking went live in January 2018. Nearly every other UK bank with a mobile app has joined since, and by March 2025 there were 13.3 million active open banking users in the UK.
Who is allowed to initiate a payment
This is the part that matters. A firm cannot simply build an app that moves money out of your customers' accounts. Initiating a payment from someone's bank account is a regulated activity: the firm must be authorised by the Financial Conduct Authority as a payment initiation service provider. That authorisation brings capital requirements, conduct rules, complaints handling and FCA supervision with it, and you can check any firm's status yourself on the FCA's public register.
What actually happens when someone pays
- The terminal shows a code with the amount and the payee already set.
- The customer scans it and their own banking app opens — the same app they already trust.
- They approve inside that app, with the same face, fingerprint or passcode check the bank applies to any payment.
- The bank moves the money over Faster Payments, directly to the recipient's account.
Two things follow from that sequence. First, the bank is always in control — the approval happens inside the bank's own app, under its own security, and the customer can see exactly who they're paying and how much before they confirm. Second, no card details exist in the transaction. There is no card number to skim, store or leak, because no card is involved.
The honest limitations
We'd rather you heard these from us than discovered them later.
- It needs a smartphone with banking. A donor without a banking app can't use it — which is exactly why every tapbanc screen offers card alongside it, always.
- Chargebacks work differently. A card payment can be disputed through the card schemes; a bank transfer is a push payment, so there's no equivalent chargeback route. For donations that's usually welcome. For retail it's worth understanding.
- Refunds are a separate payment back. They're straightforward, but they aren't a "reversal" in the card sense.
- It's newer. Some older donors will simply prefer to tap a card, and should be able to.
The short answer
Pay by Bank is regulated by the FCA, authorised inside the customer's own bank, secured by the bank's own authentication, and settled over the same Faster Payments rails your salary arrives on. It is, if anything, a shorter and better-supervised path than a card payment — which is why it can cost markedly less, especially on larger payments: on a £100 payment, 70p against £1.50 by card, at Stripe's rates with nothing added by tapbanc.