Lloyds Bank has announced the launch of Pay by Bank, a system that allows customers to make direct bank-to-bank payments, at self-service kiosks in the hospitality industry.

The move comes as the bank looks to streamline payments at checkout without cards or third-party apps while ensuring instant payment settlement for businesses.

The system was developed in collaboration with Lolly, a British company specialising in technology for the hotel sector, and CH&CO, a company in the restaurant and catering services market, and is one of the first applications of Pay by Bank in a self-service hospitality environment.

The technology allows users to select “Pay by Bank” as their payment method at a self-service kiosk.

Users can then scan a QR code and complete the payment at checkout via their mobile banking app.

Through this system, funds are transferred directly from the customer account to the retailer account in real time, offering faster transactions and lower processing fees than traditional payment methods, Lloyds said.

Transactions are authenticated by the customer's bank, with the aim of minimising the risk of fraud.

Initially tested at the bank’s UK head office, the system offers merchants immediate visibility of payments and the ability to reconcile accounts, while providing customers with a fast and intuitive payment method, the bank said.

The new payment concept will be presented at the Lloyds stand at the Open Banking Expo UK & Europe.

During the event, which will be held on 21 and 22 October at the Business Design Centre in London, attendees will be able to try out the system in action thanks to a live demo.

Mark Prayel, head of integrated payments at Lloyds, said that the system aims to offer an innovative way to simplify its customers' lives.

“We’ve had a lot of fun trialling Pay by Bank in our own head office cafeteria with colleagues, and we’re looking forward to seeing how this innovation evolves across the wider hospitality and retail space,” he added.

The bank recently announced that its barcode cash deposit tool has seen customers pay in more than £3 million since its launch in August.

The feature allows users to generate a barcode which is scanned at a PayPoint location.

The barcode is valid for two hours after activation in the app.

Customers can deposit up to £300 per day in notes and coins and £600 per month.

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