Survey Puts Recurring Pay by Bank Next: Is Your Billing Ready?

Recurring pay by bank payments are coming. Compare cost, failed payments and dispute rights with cards and ACH, and learn how to pilot them safely.

Adrian ReyesSenior Payments & Fintech Editor

October 27, 2026 · 9 min read

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Photo: Pixabay

On this page 6 sections

What the Token.io Pay by Bank Survey Found
How Recurring Pay by Bank Differs From Card-on-File and ACH Debits
Where U.S. Recurring Pay by Bank Payments Stand Today
Costs, Failed Payments and Dispute Rights Compared
Which Subscription Businesses Benefit Most
How to Pilot Pay by Bank Without Losing Card Customers

Key takeaways

The Token.io and Open Banking Expo survey asked banks, PSPs and merchants, mostly in the UK and Europe. It shows what the industry wants, not what U.S. shoppers want.
In the U.S., recurring pay by bank currently means ACH debits from an account linked through open banking. Nothing here works like the UK's commercial VRP scheme, and the CFPB's Section 1033 rule is blocked by a court order while the CFPB reconsiders it.
With cards, you can fight a chargeback. With ACH, you can't contest an unauthorized-debit claim inside the network, so authorization records and notices before each debit carry most of the risk.
A flat per-debit bank fee beats percentage card pricing only above a break-even ticket. Work out yours before you push customers to switch.

Recurring pay by bank payments are near the top of the payments industry's wish list. The people asking for them, though, are banks and payment companies, mostly in the UK and Europe, not American shoppers. In the annual Pay by Bank Signals & Trends survey from Token.io and Open Banking Expo, 59% of respondents said Pay by Bank needs recurring and one-click payments to compete with cards.

Another 62% named subscriptions and bill payments as the best place to win business from cards. For a U.S. subscription business, here is the practical answer. The U.S. has nothing like the UK's new recurring bank-payment scheme, so "recurring pay by bank" here means an ACH debit from a bank account the customer linked through an open banking connection. If your ACH billing is clean, you are most of the way there.

What the Token.io Pay by Bank Survey Found

This was the sixth annual edition. Open Banking Expo opened it on Sept. 3, 2026, to senior people in banking, payments, retail and fintech. Results came out around Oct. 20, and The Paypers covered them on Oct. 26. Respondents were banks, payment service providers (PSPs), third-party providers, merchants and industry observers, mainly in the UK and Europe. None of the published coverage gives the 2026 sample size. The 2025 edition surveyed 96 respondents, so treat the percentages as a read on industry opinion, not a measure of what the public wants.

Here are the findings reported by Finextra and The Paypers:

72% of bank respondents and 87% of PSP respondents already offer or accept Pay by Bank.
59% said Pay by Bank needs recurring and one-click capability to become a real alternative to cards.
62% saw subscriptions and bill payments as the best opportunity to displace cards, ahead of e-commerce at 59%.
45% of PSPs called open banking providers a significant or growing competitive threat. More than a third of PSPs knew of merchants going around them to work with those providers directly.

Respondents also disagreed about consumer protection when a Pay by Bank payment goes wrong. The Paypers reported that a separate Token.io survey of 150 UK businesses showed the same split over who should handle fraudulent or unauthorized transactions: 20% said a central Pay by Bank scheme should resolve issues and cover losses, 24% said the customer's bank should be responsible, and 18% weren't sure. For a recurring biller, that split matters more than the adoption numbers, because who absorbs the loss decides whether a method is safe to build on.

How Recurring Pay by Bank Differs From Card-on-File and ACH Debits

People lump three methods together here, and they behave differently.

Card on file. The customer enters a card once, your gateway stores a token, and you charge it each cycle under Visa and Mastercard rules.

ACH debit. The customer gives you a routing and account number and authorizes you to debit it. You originate the debits through your bank under the Nacha Operating Rules. Nacha is a private rule-making body, not a government regulator. Its rules reach you through the origination agreement you sign with your bank. Our guide to Nacha authorization rules for recurring memberships covers what that agreement requires of you.

Pay by bank. The customer logs in to their bank through an open banking provider instead of typing account numbers. The account is confirmed on the spot, and some providers can also check the balance. In the U.S., the money still usually moves over ACH. Our explainer on how open banking payments work for merchants walks through the flow.

What Variable Recurring Payments Add in the UK

The UK went further with commercial variable recurring payments (cVRP). The customer sets a standing consent once through open banking. The business then collects varying amounts within that consent, settled instantly over Faster Payments, according to Modulr's Wave 1 guide. The UK Payments Initiative (UKPI) launched the scheme on June 2, 2026. Plaid notes that it is the UK's first major new payment scheme since Faster Payments.

Wave 1 covers only five sector groups:

energy, utilities and telecoms
regulated financial services
e-money institutions
local and central government
registered charities

All of these already fall under regulated consumer protection frameworks. General e-commerce is slated for Wave 2, which trackers such as Open Banking Tracker expected in the second half of 2026. Subscription merchants are still waiting.

Where U.S. Recurring Pay by Bank Payments Stand Today

Three facts set the U.S. picture as of Oct. 27, 2026.

First, nothing in the U.S. works like cVRP. Recurring bank payments here run on ACH. Request-for-payment on the instant payment networks is a separate track. Our comparison of FedNow and RTP for merchants covers where they stand.

Second, the federal open banking rule is on hold. In October 2024 the CFPB finalized its Personal Financial Data Rights rule, which implements Section 1033, and set the first compliance date for April 1, 2026. A federal court has since barred the CFPB from enforcing it while the Bureau reconsiders the rule, Cozen O'Connor reported. According to Open Banking Tracker, the rewrite reopens whether banks can charge fees for data access. Pay by bank depends on those account connections. If banks can charge for them, someone in the chain pays, and merchants usually sit at the end of it. Our update on pay by bank and the CFPB open banking rule tracks the details.

Third, ACH fraud monitoring got stricter this year. Nacha's new risk management rules took effect in two phases. Phase 1 began March 20, 2026, for the highest-volume participants. Phase 2, effective June 19, 2026, extended the requirements to all remaining ACH originators and third-party service providers regardless of volume, as Kyriba's FAQ summarizes. These are network rules, not federal law. Your bank enforces them through your origination agreement, so expect questions about how you screen for fraud.

Costs, Failed Payments and Dispute Rights Compared

The table compares how each method is structured, not specific prices, because prices depend on your processor agreement and card mix.

	Card on file	ACH debit (keyed account numbers)	U.S. pay by bank (linked account, ACH)
Pricing structure	Mostly a percentage of the sale: interchange, network fees, processor markup	Usually a flat per-item fee, or a percentage with a cap, set by the processor	ACH pricing, often plus a provider fee for linking and verification
Common failure causes	Expired or reissued cards, issuer declines, credit limits	Insufficient funds, closed accounts, mistyped numbers	Insufficient funds, closed accounts; mistyped numbers mostly disappear
When you learn a payment failed	At authorization, in seconds	Days later, when the return comes back	Days later, though a balance check can flag problems first
Customer dispute path	Chargeback through the card issuer under Visa or Mastercard rules; you can respond with evidence	Return through the customer's bank under Nacha rules, plus federal consumer protections for electronic transfers	Same as ACH debit

Merchants most often misread the dispute row. With cards, you can fight a chargeback through representment. With ACH, a consumer who tells their bank a debit was unauthorized, or that they canceled the authorization, generally gets the money back. You have no way to contest that inside the ACH network. You recover the money from the customer directly, if at all, so authorization records and notices before each debit do most of the work. Card disputes, meanwhile, count toward programs like Visa's VAMP fraud and dispute thresholds, so moving some volume off cards can ease pressure on your card ratios. Nacha watches ACH return rates too, though. The risk moves to another rulebook rather than disappearing.

Failed payments also show up at a different point. Card declines happen up front, when a card expires or is replaced. A bank account doesn't expire, but an ACH debit can fail days after you've already given the customer another month of service. Smart retries and dunning still apply. See our guide to smart retries for failed subscription payments.

Worked Example: A Martial Arts Studio Shifting Some Dues

All numbers here are illustrative assumptions, not quotes. Use your own effective card rate from your statement and your provider's actual bank-payment pricing.

250 members paying $120 a month, or $30,000 in monthly dues
Assumed all-in card cost: 2.9% of the sale
Assumed bank-payment cost: $0.75 per debit, all fees included
Assumed result: 30% of members (75) switch to bank payment
Assumed 3 returned debits a month at $5 each in return fees

Before the switch, cards cost $870 a month ($30,000 × 2.9%). The 75 members who switch pay $9,000 a month. On cards that would cost $261; by bank debit it costs $56.25 (75 × $0.75). The gross saving is $204.75 a month. Subtract $15 in return fees and the net is $189.75 a month, or about $2,277 a year, before counting the staff time spent chasing returns.

To decide, find your break-even ticket. Under these assumptions, a $0.75 flat fee beats a 2.9% card cost on any charge above about $25.86 ($0.75 ÷ 0.029). On a $9.99 subscription, the card costs about $0.29 and the bank debit costs $0.75. Bank payment loses.

Which Subscription Businesses Benefit Most

Gyms and martial arts studios charge dues well above the break-even point, and members stay for months or years. Enrollment spikes in January and at back-to-school time. Many already collect ACH, so pay by bank mainly speeds up signup at the front desk. Our breakdown of ACH vs. credit card for gym dues goes into the comparison in more depth, and our gym and fitness studio payments page covers options on the card side.

Professional services firms billing monthly retainers for bookkeeping, IT support or marketing often charge hundreds or thousands of dollars per cycle. Business clients are used to paying by bank, and a percentage card fee on a large retainer is real money. See payment processing for professional services.

Education and training providers run tuition installment plans, tutoring packages and bootcamp payment plans. Tickets are large, enrollment peaks before the fall and spring terms, and a missed installment mid-term is awkward to handle.

Low-ticket consumer subscriptions, such as apps and boxes under about $25, gain the least. Card fees on small charges are already lower than a flat bank fee, and every extra checkout step costs signups. Whatever payment method you use, state auto-renewal laws still govern disclosure, consent and cancellation. See our automatic renewal compliance map. That's general information, not legal advice, so confirm the specifics with a lawyer.

How to Pilot Pay by Bank Without Losing Card Customers

Check your billing setup first. Your recurring billing platform and gateway need to store bank tokens alongside card tokens and retry each one by its own rules. Our guide to choosing recurring billing software lists what to ask vendors.
Offer bank payment as an option, not a requirement. Target plans priced above your break-even ticket.
Get the authorization wording right. Nacha requires specific authorization terms for recurring debits. See ACH authorization forms, wording and proof. Keep a backup card on file only if the customer explicitly agrees to be charged on it.
Verify accounts before the first debit. Instant verification is the main advantage pay by bank has over typed-in account numbers. Our article on instant bank account verification explains how it cuts returns.
Send a notice before each debit. A short email with the amount and date heads off "unauthorized" claims you can't contest.
Measure for 90 days. Track failure rate by payment method, return reasons, cost per dollar collected, and churn among customers who switched compared with those still paying by card.

Two things to watch next: whether UKPI opens Wave 2 to subscriptions and e-commerce, and what the CFPB's revised Section 1033 proposal says about fees for data access. Until then, the most useful thing to do on Monday is work out your effective card rate and your break-even ticket. If you want a second look at your recurring card costs or online payment gateway options, request a free quote and a MannyPay specialist will respond within one business day.

Sources

About the author

Adrian Reyes

Adrian Reyes is Senior Payments & Fintech Editor for Beyond the Swipe, covering credit card processing, merchant accounts, payment technology and processing fees.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.