With card processing fees, it can be difficult to know what you’re actually paying per transaction once interchange, assessment fees, and processor margin are included. Pay by bank eliminates two of those three layers while improving settlement speed.

Below, we’ll explain what card fees consist of, how pricing differs for pay by bank vs. card payments at high volume, and which business profiles can benefit most from adding pay by bank to checkout.

Key takeaways

• Pay by bank eliminates interchange and network assessment fees. That reduces per-transaction costs compared to standard card processing.

• Pay by bank transactions can settle in the same time frame as card payments or faster.

• Offering pay by bank alongside cards gives customers a choice without forcing existing card users to change how they pay.

What are you paying on every card transaction?

Different card types, channels, and countries have different associated fees. Generally, the cost of accepting cards means accounting for the following costs:

• Interchange: This is the largest fee. It’s paid to the card-issuing bank on every transaction. Interchange rates shift based on card type and how the payment is taken, but they cannot exceed 21¢ plus 0.05% of the transaction value in the US. A customer debit card has lower rates than a premium rewards credit card.

• Assessment fees: These go to the card networks for operating the payment networks that run your transaction. They’re typically smaller than interchange, usually a fraction of a percent, but they’re on every transaction.

• Processor margin: This is what your payment provider adds on top, whether that’s a flat markup, a percentage, or both.

How do pay by bank and card payments compare on cost?

Pay by bank routes payments directly from a customer’s bank account to yours, bypassing card networks and their fee layers. There’s no interchange because the card-issuing bank isn’t involved. There’s also no assessment fee because no network is involved. What’s left is the processor margin and any fee added from the payment network that moves the money (which is usually lower than interchange and assessment fees).

The exact cost difference depends on the customer’s card mix, the volume tier, and which payment provider you use. Stripe data shows that businesses save up to 70% per transaction compared to card payments by letting customers pay by bank. So if your business spends $10,000 in card processing costs per month, that amount could drop to as low as $3,000 if every customer switched to pay by bank.

Does settlement speed differ between pay by bank and cards?

Settlement timing affects your business’s cash flow and available working capital. Consider the following when you think about pay by bank vs. card payment settlement:

• Traditional ACH: The Automated Clearing House (ACH) is the older bank-to-bank transfer network. It usually settles in one to three business days. The delay can create working capital problems for businesses that manage tight cash cycles, but same-day ACH transfers speed up the process.

• Standard card settlement: This typically takes two business days. Many businesses have planned around that timing and built their cash flows accordingly.

• Stripe’s Instant Bank Payments: This settles in two business days and matches card speed while running on bank payment networks. You gain the savings of direct bank payments and retain the settlement window you’re already working around.

• Real-time payments: Transfers sent via the FedNow or Real-Time Payments (RTP) network settle instantly.

The gap that historically made many businesses wary of bank payments has mostly been closed. When settlement speed matches what you’re already used to, the decision comes down to economics.

Do customers choose pay by bank at checkout?

Customer willingness to pay by bank is higher than some businesses expect. In 2025, the ACH Network, the dominant bank-to-bank payment system in the US, processed 35.19 billion payments overall. Same-day ACH volume totalled 1.45 billion payments and rose nearly 17% from 2024. Direct bank payments are basic infrastructure and offering them at checkout accommodates how customers already transact.

Checkout presentation matters. When customers encounter a bank payment option that looks unsophisticated or requires manually entering routing and account numbers, cart abandonment tends to rise. When the experience is clear and recognisable, it tends not to rise. Offering pay by bank doesn’t mean choosing between the conversion rates of pay by bank and cards. Customers who choose cards can still use them. You’re adding an option for those already inclined to pay from their banks.

How do chargebacks compare to bank-initiated returns?

Card chargebacks and bank-initiated returns are structurally different problems. Conflating them can lead to bad risk modelling.

Here's how they differ:

• Card chargebacks: These are initiated by the customer through their card issuer. The customer disputes the transaction, the issuer opens a case, and you respond with evidence within a defined window. If you lose the dispute, you lose the transaction amount plus a chargeback fee. Rates above certain thresholds attract scrutiny from the card networks.

• Bank-initiated returns: These happen when a bank payment fails after initiation, commonly due to insufficient funds or a closed account. The mechanics are closer to a returned cheque than to a chargeback.

Stripe covers the risk of bank-initiated returns on Instant Bank Payments, which removes the financial unpredictability from this category. If a payment is returned, Stripe covers it.

Which businesses benefit from pay by bank?

The return on investment is often strongest when card fees are your biggest variable cost and your transaction profile gives you considerable exposure to high-interchange card types.

These are the business profiles where the advantages are most pronounced:

• High-volume B2C businesses: Businesses that process high monthly volumes of card payments can see large savings because each card transaction carries the full card fee stack. The unit economics advantage of bank payments appears clearly in monthly financials once volume is sustained.

• Subscription platforms: Recurring transactions are predictable, which makes it easier to model the cost difference. And bank payments avoid the chronic problem of payment failure that occurs for subscription billing with card payments.

• Marketplaces: These often carry fees on inbound payments from buyers and fees on outbound payouts to sellers. Pay by bank can address both sides, particularly when transaction sizes are large enough that per-transaction fees compound quickly.

• Big-ticket businesses: A higher per-transaction value means each card fee is larger in absolute dollars so the same percentage point cost gap between cards and bank payments translates into a bigger saving per transaction. That gap can compound into a significant annual cost difference for businesses that process a steady mix of high-value transactions.

How do you offer pay by bank alongside cards?

Pay by bank is an additive checkout option, not a replacement for cards. You’re giving the segment inclined towards bank payments a way to act on that preference without disrupting anyone else’s experience.

The practical starting point is to pull your last three months of transaction data, identify the share of big-ticket transactions, track what portion is recurring, and run the fee difference at your actual volume. That number will tell you whether this is a rounding error or a budget line worth refining.

Once you’ve decided to adopt pay by bank, take the following steps:

• Ensure your payment provider supports pay by bank: If it does, integrate it as one of your accepted payment methods. Businesses that already use Stripe don’t need to complete a separate technical step to enable Instant Bank Payments. It’s shown through the same checkout infrastructure, with no bifurcated checkout flow to maintain.

• Design the checkout experience: Customer experience is important to adoption. Best practice includes displaying pay by bank alongside card options, minimising the number of steps required, using familiar banking and trust signals, and fine-tuning for mobile devices.

• Test the checkout flow: Before you launch, thoroughly test customer authentication flows, the bank selection process, and payment confirmation screens. Testing should cover multiple banks and customer scenarios to ensure reliability.

• Incentivise adoption: Some businesses offer a small discount for bank payments to accelerate the shift. Even with that discount, pay by bank tends to cost less than cards given the fee differential.

Stripe makes it easy to present pay by bank alongside cards at checkout as a first-class option. Customers who’ve previously linked their bank accounts through Link by Stripe see it prepopulated so there’s no manual entry needed.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods and Link, a wallet built by Stripe.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.

• Improve payment performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments or get started today.