Using the article’s illustrative £0.50 Pay by Bank fee and a 1.5% blended card rate, the break-even point is about £33. Your actual threshold depends on your contracted rates and any fixed card fees.
Card fees often include a percentage of transaction value. This illustration compares that percentage with a flat Pay by Bank fee per transaction.
What is Pay by Bank?
Pay by Bank is an account-to-account (A2A) payment method that lets customers pay directly from their bank account. Instead of entering card details, the customer chooses Pay by Bank at checkout, selects their bank, authenticates through their banking app, and confirms the payment.
For the customer, the experience still feels simple. For the merchant, the economics can look very different.
Why the threshold matters
Card pricing often includes a percentage. The cost grows with the value of the payment. A merchant taking a £20 payment pays a small card fee. The same merchant taking a £200 payment pays roughly ten times the percentage-based component, even though the product, checkout, and operational work are identical.
A flat bank-payment fee works differently. Under this illustrative fee structure, a small payment and a large payment incur the same transaction fee. Your actual agreement may include different fee components.
That creates a natural break-even point.
Take a merchant paying a 1.5% blended card rate, with Pay by Bank at £0.50 per transaction. The two costs meet at about £33, and that threshold shifts with your actual card rate and any fixed card fees.
Below that ticket size, cards are typically cheaper. Above it, Pay by Bank pulls ahead, and keeps pulling further ahead as ticket size climbs.
What sits above and below the line?
Above the threshold: Merchants with average payments above their calculated threshold may save more as transaction values rise.
Below the threshold: Merchants below their calculated threshold may find cards cheaper.
Run your own numbers
The math is simple enough to do on a napkin: monthly transaction count, average payment amount, and the fixed and percentage fees for each method. Where the math doesn’t land in Pay by Bank’s favour, it doesn’t land, and the calculator will tell you so.
Try the savings calculator, or talk to us and we’ll run your numbers with you.
What the math actually tells you
For an operator reviewing payment costs, the conclusion is simple.
If the average ticket sits above the threshold, Pay by Bank may reduce processing costs enough to justify adding another checkout option.
If the average ticket sits below the threshold, Pay by Bank is unlikely to reduce processing costs for that payment profile.