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The financial technology firm also reported that pay by
Fed: Don't rule out cash bank is gaining in popularity, especially among younger
consumers and when tied to rewards.
The Federal Reserve in its 2024 Diary of Consumer
Payment Choice makes a good case for not ruling out Almost half of Gen Z said they would add pay by bank as
cash from the consumer payment mix. It revealed a payment option for online retailers they frequently shop.
that cash is the third-most used payment method, Among baby boomers, just 22 percent would provide ac-
with consumers making an average seven cash cess to their checking accounts for online purchases.
payments per month, most commonly at the POS
for purchases under $25. This is another data point I totally understand. Recently,
I had to make an online payment and wanted to use my
checking account. But I didn't feel comfortable sharing my
account information with the company, so I chose PayP-
• 49 percent, debit cards al, where my checking account is my preferred payment
• 28 percent, credit cards method.
• 17 percent bank transfers Apparently, I'm in the minority, MX reported that 62 per-
• 11 percent digital wallets cent of baby boomers (my generation) said they would
never use pay by bank, compared to an average of 28 per-
Not surprisingly preferences vary by generation. Older cent across all other generations.
consumers are especially security conscious: 60 percent of
those over the age of 60 who were queried for Paysafe's In- I suspect this will change, however, and in pretty short
side the Wallet report said they select the payment method order. Walmart, the nation's largest retailer, is now work-
they consider most secure. On the other hand, 37 percent ing with Fiserv to allow online shoppers to pay by bank,
younger consumers polled said the speed with which a beginning in the third quarter of 2025, according to in-
transaction can be completed matters most to them. formed sources.

Payment method selection can vary based on what some- And Fiserv is said to have plans to support other retailers'
one is purchasing. For example, when Paysafe asked re- pay-by-bank options leveraging its NOW network, which
spondents which payment methods they had used for has links to FedNow (the Federal Reserve's real-time pay-
gaming or gambling purchases, they were more apt to say ment network) and the Fed's private sector competitor RTP.
digital wallets (16 percent) than when they were asked
their generally preferred payment method (11 percent in- At least one large bank, JPMorgan Chase also has a pay-
dicated digital wallets). by-bank solution that merchants can use in online or in-
person environments. "Pay by bank at the point of sale is
Paysafe's report also revealed ongoing changes in pay- a revolutionary idea," said Ron Herman, founder and CEO
ment habits. Asked which payment method they were of Sionic.
using more than they had the previous year (2023) debit
cards showed a notable gain (a 53 percent increase); bank Atlanta-based Sionic, a pioneer in the pay-by-bank field,
transfers showed an impressive gain (39 percent); credit is working with Jack Henry & Associates to make pay by
cards gained, as well (33 percent increase); and digital bank a viable option this year for the community banks
wallets registered a gain at 32 percent. and credit unions that use Jack Henry to support back-end
technology solutions.
One data point from the Paysafe report that should not
escape notice is that 43 percent of consumers will aban- Sionic designed an AI-based service that will help identify
don their online shopping cart if their preferred payment fraud in pay-by-bank implementations; fraud concerns
method isn't available. I can attest to this first hand. have been a major stumbling block for widespread mer-

MX Technologies: familiarity, rewards, hold clout chant adoption of pay by bank.
An August 2024 report from MX Technologies revealed That, along with all of Sionic's pay-by-bank technologies,
that consumers are looking for security, convenience and will be available on a subscription basis in the Google
rewards when it comes to choosing payment methods. But Cloud marketplace early in the second quarter of this year,
it also suggested that many consumers (78 percent) prefer Herman said.
to pay for things using the method they are most accus-
tomed to. Herman estimated that 200 of the top 250 retailers are
ready and eager to try out the technology. "I think the
stars are aligned," he said.

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