Amazon has recently unveiled a new payment feature, Pay by Bank, aimed at facilitating purchases for UK customers through direct bank account transactions.
This initiative will initially focus on enabling users to link their UK bank accounts for retail payments. Amazon anticipates that support for Prime membership payments could be added in the future.
Refunds and integration with banking systems
A key feature of Pay by Bank is its capability to process refunds promptly, often within minutes after Amazon receives returned items. This contrasts with typical card refund procedures that can take several business days.
The payment method leverages customers’ existing authentication systems provided by their banks, such as biometric verification or PIN entry via mobile banking apps.
According to Amazon, Pay by Bank is compatible with more than 99% of UK banks. During setup, users can choose from a secure list of participating institutions without the need for frequent updates on payment details due to the direct bank account connection.
All transactions made through Pay by Bank are subject to Amazon’s A-to-Z Guarantee and come with the usual return and refund policies offered by the platform. The UK Payment Services Regulations offer additional consumer protections for up to 13 months.
Regulatory and market context
The launch of Pay by Bank aligns with the UK National Payment Vision framework, which supports the growth of account-to-account payments in e-commerce.
This move reflects a broader trend towards Open Banking solutions where merchants can access customer bank accounts via regulated APIs after receiving authorization from customers. The payment process will authenticate users through their banking apps instead of Amazon’s platform, enhancing transaction security within existing financial infrastructure.
At present, specific details regarding transaction volumes and processing fees for Pay by Bank remain undisclosed by Amazon. Additionally, no timeline has been announced for expanding the service beyond UK retail purchases to Prime membership payments.
