Payments glossary
Pay-by-bank
Pay-by-bank is the umbrella term for payments made straight from the customer's bank account at checkout - approved through a bank login, a banking app or a proxy such as a mobile number - rather than through a card. In South Africa its main forms are Instant EFT and PayShap.
What counts as pay-by-bank?
Any checkout payment that moves money account-to-account without a card in the middle. That includes Instant EFT flows, where the customer logs into internet banking to approve a pre-populated transfer; real-time rails such as PayShap, where the customer confirms a payment request in their banking app; and open-banking payments in markets with API access to bank accounts. What unites them is that the customer's own bank authenticates the payer, and the merchant is paid from a bank balance rather than a credit line.
Why pay-by-bank is growing
Three forces push merchants towards it. Cost: account-to-account payments sit outside card interchange, so the economics are set by the rail rather than the card schemes. Reach: they serve customers who have bank accounts but no cards, or who will not enter card details online. Risk: there is no card number to compromise and no card-scheme chargeback path, so the fraud and dispute profile looks very different from cards. The trade-off is that refunds and recurring collections need their own mechanisms, because the card rails' built-in tooling does not apply.
Pay-by-bank on LekkaPay
Instant EFT is live on LekkaPay through Ozow in South Africa and NIBSS in Nigeria, with PayShap coming soon - see Instant EFT.
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Payments without the jargon.
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