Most Brits have no clue what the term “pay-by-bank” means, despite using the payment technology regularly.

According to a new survey of 2,157 UK-based adults conducted by YouGov and fintech firm Yaspa, just 38 per cent understand the meaning of this term - down from 55 per cent last year.

Pay-by-bank refers to the ability to make online payments straight from your bank account, rather than entering your card details manually.

Powered by open banking, pay-by-bank typically functions as an authentication request that appears in your banking app as you’re about to purchase an item on the internet.

Payments are usually instant, with the money coming out of the customer’s bank account once they’ve approved the banking authentication request.

Despite a lack of consumer awareness around this term, there was a 53 per cent increase in
open banking payments last year.

Yaspa believes that this issue comes down to the fact that many different terms are used to describe pay-by-bank, such as open banking, instant bank transfer and account-to-account, and the financial services industry has yet to choose one single term.

Confusion around open banking terminology could potentially stall the growth of this booming area of the fintech industry. Yaspa found that consumers are more inclined to use less efficient but more traditional payment methods if they don’t recognise payment terminology when they’re about to check out.

BACS is a perfect example. While BACS payments require customers to provide their account number and sort code, instead of a quick press of a button to authenticate a pay-by-bank payment, the word “BACS” has been a universally accepted industry term for decades. Because of this, 77 per cent of consumers are aware of it.

Yaspa also found that, as well as opting for payment methods they’re aware of, consumers are continuing to prioritise security and ease of use in their online payment decisions.

James Neville, CEO at Yaspa, said: “The 2026 findings are a clear signal that the industry’s lack of alignment on language is holding back the potential of open banking.

“Consumers value the speed and security that Pay by Bank offers, but they won't actively choose a method they don't recognise. Standardising a universal consumer-facing term is essential for scaling. By removing the burden on users to differentiate between identical payment methods, we foster the trust necessary for mass-market uptake."

---