Mastercard is partnering with Elavon, a digital payments provider, to enable merchants to offer their customers the option of paying for goods and services directly through their banking app.

The ‘Pay by Bank’ app, which will be offered to UK merchants from 2019, aims to improve the convenience and security of digital payments for customers.

‘Pay by Bank app’ was created by Vocalink, a Mastercard company, and Elavon will help merchants integrate the technology into their checkout pages.

The payment method does not require customers to provide a separate PIN, password or a card number to make a purchase.

Transactions take place in real time and shoppers can see their account balance before making the payment. Verification is handled by the customer’s own banking app.

Recent research carried out for Elavon while assessing the use cases for such a service showed that two-thirds of shoppers would abandon their online transactions if they encountered friction.

Major sources of frustration related to online payments include requests for repeated information input (69 per cent), obligatory sign-up processes (54 per cent) and limited payment options (41 per cent).

A pilot of the ‘Pay by Bank’ app led by Mastercard involved more than 330,000 on-boarded users.

Jon Wood, chief commercial officer for Pay by Bank app said the tie-up would have a “big impact on payments, bringing benefits to consumers, retailers and banks.

He added that the company had plans "to shape the future of digital commerce, as more banks and merchants offer this as a payment option to millions.”

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