Cost to Build a Pay-by-Bank App

As commerce moves increasingly online, both merchants and customers are searching for payment methods that are secure, fast, and easy to use. Traditional payment systems often involve extra steps, high fees, and delays that disrupt the shopping experience. This is where a pay by bank app comes in, offering a seamless way to make transactions directly from a bank account without unnecessary friction.

A pay-by-bank solution combines real-time processing, secure authentication, and direct integration with banking networks to deliver speed, transparency, and reliability. By removing intermediaries and reducing transaction costs, these apps not only improve the payment experience for users but also create efficiency and trust for merchants. Advanced features like instant payment confirmation and smart routing make them a powerful choice in modern commerce.

In this blog, we’ll break down the factors that determine the cost to build a pay-by-bank app, the technologies that drive it, and what businesses need to plan for when investing in this transformative payment solution. As we have helped launch numerous solutions for various industries, IdeaUsher has the expertise to build a pay by bank app that will be secure, transparent and market-ready to launch. 

What is a Pay by Bank App?

A Pay by Bank App is a secure, real-time payment solution that allows users to make transactions directly from their bank account, without the need for cards or third-party wallets. These apps connect to a user’s bank through secure APIs, enabling instant payments while maintaining full control over funds. Unlike traditional payment methods, Pay by Bank apps streamline checkout processes, reduce transaction costs, and enhance security by eliminating intermediaries. 

With the rise of digital payments, these apps are gaining popularity for their speed, security, and cost efficiency. They connect directly to bank accounts, improving convenience and trust.

The core purpose of Pay by Bank apps goes beyond transactions; they are designed to make digital payments more secure, cost-efficient, and inclusive. Their goals can be understood as:

• Simplifying user payments by eliminating cards and wallets, enabling direct account-to-account transactions in real time
• Enhancing financial transparency with clear transaction visibility, real-time confirmation, and improved trust between users and merchants.
• Reducing operational costs for businesses by cutting out card networks and third-party intermediaries, lowering transaction fees.
• Improving cash flow through instant settlement of funds, particularly valuable for small and medium-sized businesses.
• Expanding financial inclusivity by offering a low-cost, accessible payment alternative for consumers and merchants in emerging and developed markets alike.

How does the Pay-by-Bank App work?

The Pay-by-Bank app lets customers make instant, secure payments directly from their bank account without needing cards or third-party apps. It streamlines checkout by connecting users straight to their banking app for quick authorization.

1. Initiating the Payment

The process starts when a customer selects “Pay by Bank” at checkout. The app redirects them to their bank via an open banking API, complying with regulations like PSD2 and Open Banking, ensuring the payment comes from a verified source.

2. Bank Authentication

The customer must log in to their bank account using Strong Customer Authentication (SCA) such as biometrics, PINs, or two-factor authentication, since it is mandated by European regulations, adding an extra trust layer beyond legacy card transactions.

3. Payment Authorization

Once authenticated, the bank shows transaction details for review and authorization. The bank then checks funds and prepares the transfer. Unlike cards, no sensitive info is exchanged, reducing fraud risk.

4. Real-Time Transfer Over Payment Rails

The authorized payment occurs over real-time systems like SEPA Instant or Faster Payments, ensuring settlement in seconds. Some providers optimize this with smart routing for the fastest settlement.

5. Merchant Notification & Settlement

Once the transfer is confirmed, the merchant gets an API webhook notification, allowing instant shipping, activation, or access. In 2023, over 13% of SEPA credit transfers used SEPA Instant, showing its growing mainstream adoption.

6. Completion & Record

The transaction is recorded in the user’s bank account and Pay-by-Bank app for easy tracking. Settlement is almost instant, eliminating delayed chargebacks, making it predictable for merchants and customers.

How Pay-by-Bank Apps Streamline Modern Transactions?

Pay-by-Bank apps revolutionize transactions, making them faster, secure, and transparent. Using open banking and real-time payments, they simplify payment flows for consumers and merchants, reducing friction.

1. Instant Bank-to-Bank Transfers

Pay-by-Bank apps enable payments to occur directly from one bank account to another in real time. This removes the delay associated with card-based transactions or bank transfers, ensuring immediate confirmation for both parties.

2. Simplified Checkout Process

By integrating directly with a user’s bank account, Pay-by-Bank apps eliminate the need to enter card details or log into payment gateways. This simplifies checkout and improves the customer experience, reducing cart abandonment rates.

3. Strong Authentication & Secure Access

Transactions are authorized through the bank’s own authentication protocols, such as biometric verification or two-factor authentication. This reduces the risk of fraud while giving customers confidence in the payment process.

4. Lower Operational Overhead for Businesses

With reduced reliance on card networks and payment processors, businesses can cut operational costs and streamline payment reconciliation. This also enables faster access to funds and improved cash flow management.

5. Transparent Payment Tracking

Both consumers and merchants benefit from detailed, real-time transaction records. Customers can verify payments instantly, while merchants gain precise data for reconciliation and reporting.

The Rising Demand for Pay-by-Bank Solutions

The global mobile payment market was valued at USD 88.50 billion in 2024 and is projected to reach USD 587.52 billion by 2030, growing at a CAGR of 38.0%. This growth is driving demand for pay‑by‑bank apps, which enable secure, low‑cost, bank‑to‑bank transactions without intermediaries.

This rapid expansion is fueled by rising smartphone use, wider internet access, and demand for seamless, secure payments. Consumers and businesses prefer pay‑by‑bank solutions and direct bank transfers because they are more secure, cheaper, and faster. In the United States, credit cards account for about 32% of retail payments, debit cards 30%, and cash only 16%, indicating room for alternatives that improve convenience and efficiency.

Growing Investment in Pay‑by‑Bank Technology

The pay‑by‑bank sector is attracting significant investment, reflecting strong confidence in its potential:

• Banked, a London fintech providing pay-by-bank services, secured an extra USD 15 million in a Series A extension. Led by Insight Partners and supported by Citi, NAB Ventures, and Rapyd, the funding aims to fuel Banked’s global growth.
• Mastercard, partnering with J.P. Morgan, launched a pay‑by‑bank solution enabling merchants to accept payments directly from bank accounts. This initiative marks a significant push toward mainstream adoption of account‑to‑account payments.
• Wonderful, a UK pay‑by‑bank provider, offers APIs and apps for real‑time online and in‑person transactions. It integrates with major e‑commerce systems, including WooCommerce, ensuring easy adoption for merchants. 

The rapid growth of the mobile payment market highlights a shift in transactions, with pay‑by‑bank apps leading the change by offering faster, secure, and cheaper payments. Backed by investments and partnerships, this tech is set to become mainstream, transforming digital commerce. For businesses, adopting pay‑by‑bank solutions is crucial to staying competitive.

Why Pay-by-Bank Apps Are Shaping the Future of Digital Payments?

Pay-by-Bank apps are redefining the way people pay by offering faster, safer, and more convenient alternatives to cards and wallets. Their growing adoption highlights a shift toward direct, bank-driven digital payments that are set to dominate the future of transactions.

1. Rising Adoption of A2A Payments

Account-to-Account (A2A) payments are increasing as they bypass card networks. Pay-by-Bank offers faster, direct transfers for smoother transactions, making direct bank payments a natural alternative to cards.

2. Lower Costs for Merchants

Traditional card payments incur high interchange and processing fees. Pay-by-Bank reduces these costs, helping merchants save and improve margins. Fewer intermediaries let businesses price more competitively or reinvest savings.

3. Stronger Security Through SCA

With Pay-by-Bank, users authenticate directly via biometrics or multi-factor methods, reducing fraud risks significantly compared to traditional card transactions. It also enhances consumer trust, as security is managed by the user’s trusted financial institution.

4. Real-Time Settlement Benefits

Unlike card payments that may take days, Pay-by-Bank uses instant rails, allowing merchants quicker access to funds, better cash flow, and reducing payment delay risks that can disrupt operations.

5. Smoother User Experience

Pay-by-Bank simplifies payments with biometric authentication, removing the need for card details. In 2023, UK open banking payments topped 11.4 million, up 102.4% from 2022, showing consumer preference for speed and simplicity.

Cost Breakdown of Pay-by-Bank App Development

Developing a Pay-by-Bank app involves multiple cost factors, from compliance and security to design and integrations. Understanding the pay by bank app cost breakdown helps businesses budget effectively and build a solution that meets user expectations.

Total Estimated Development Cost

The total pay by bank app cost depends on features, security requirements, and regional regulations. Estimating this figure upfront gives businesses a realistic view of investment and ROI.

• MVP Version (Core Payments + Compliance Features): $55,000 – $70,000
• Mid-Level App (Banking APIs + Advanced Security + Dashboard): $80,000 – $110,000
• Enterprise-Grade Platform (AI Fraud Detection + Multi-Bank Scaling + Advanced Analytics): $120,000 – $160,000+

Note: The cost of building a Pay-by-Bank app depends on regulatory requirements, integration with banking APIs, and advanced features like AI fraud detection or cross-border payments.

Consult with IdeaUsher’s expert team for a tailored estimate. With proven expertise in fintech, Open Banking, and regulatory compliance, our developers can design a secure, scalable, and cost-efficient solution ready for market adoption.

Ongoing Costs of Pay-by-Bank App Development

Ongoing pay by bank app cost goes beyond the initial build, covering updates, security, compliance, and maintenance. These expenses ensure the app remains reliable, secure, and aligned with evolving user needs and regulations.

1. App Maintenance & Updates (~ $8,000 – $18,000 annually)

This covers bug fixes, UI/UX improvements, regulatory updates, and security patching. Since fintech apps must meet evolving compliance standards, updates are crucial for uninterrupted service.

Impact: Keeps the app compliant, secure, and user-friendly, avoiding downtime and regulatory risks.

2. Banking API & Compliance Fees (~ $12,000 – $25,000 annually)

Pay-by-Bank apps rely on integrations with Open Banking APIs, PSD2-compliant services, and KYC/AML providers. These APIs often have subscription or per-transaction fees.

Impact: Ensures the app can process real-time transactions legally and securely while staying aligned with financial regulations.

3. Cloud Hosting & Infrastructure (~ $10,000 – $20,000 annually)

The app requires secure cloud infrastructure (AWS, Azure, or GCP) with features like encrypted storage, real-time data processing, and high availability.

Impact: Guarantees scalability, reliability, and strong data protection, critical for handling sensitive financial data.

4. Technical Support & Feature Enhancements (~ $7,000 – $15,000 annually)

Covers customer support, troubleshooting, and rolling out new features like biometric authentication, AI-driven fraud detection, or dashboard upgrades.

Impact: Boosts user trust and keeps the app competitive in the fast-evolving fintech space.

5. Transaction Monitoring & Fraud Prevention (~ $15,000 – $30,000 annually)

Covers AI-driven fraud detection systems, anomaly monitoring, and real-time alerts to flag suspicious payments. Fintech apps must constantly adapt to new fraud patterns.

Impact: Protects both banks and end-users, reducing financial risks and improving trust in the app.

6. Licensing & Regulatory Audits (~ $10,000 – $25,000 annually)

In regulated markets, apps need recurring audits, licenses, and certifications (PCI-DSS, ISO 27001, PSD2 audits, etc.) to remain operational.

Impact: Ensures the app’s legality in multiple regions and avoids fines or service disruptions.

Features That Influence Development Cost in Pay-by-Bank Apps

When planning a Pay-by-Bank solution, the choice of pay by bank app features directly impacts both development complexity and cost. Below are the most influential features you should consider, along with their ROI potential and strategic business value.

1. Bank Account Linking & Verification

Investment Range: $8,000 – $15,000

This feature allows users to securely link their bank accounts within the app, using protocols like Open Banking APIs for instant verification and secure data sharing. It’s the foundation of a Pay-by-Bank platform, ensuring seamless onboarding and quick payment initiation.

Business ROI: Enables faster user onboarding and reduces drop-offs, increasing transaction volume and customer retention.

Strategic Advantage: Builds trust and compliance credibility, positioning your app as a secure gateway for bank-based payments.

2. Multi-Bank Integration

Investment Range: $15,000 – $35,000

A critical feature that allows users to link multiple bank accounts and initiate payments directly from their accounts. It involves building secure APIs, supporting different banking protocols, and ensuring real-time synchronization across financial institutions.

Business ROI: Expands the app’s market reach by catering to users with accounts across multiple banks, increasing user acquisition and engagement.

Strategic Advantage: Positions your platform as a one-stop payment solution that delivers superior flexibility and convenience compared to traditional payment apps.

3. Open Banking API Connectivity

Investment Range: $20,000 – $40,000

Integrating with open banking APIs is essential for accessing user account data and initiating payments. It requires robust backend architecture, compliance with banking standards, and continuous updates as regulations evolve.

Business ROI: Reduces transaction costs by eliminating intermediaries like card networks, directly boosting revenue margins.

Strategic Advantage: Strengthens trust and transparency while future-proofing the platform for upcoming financial innovations and partnerships.

4. Biometric & Multi-Factor Authentication

Investment Range: $15,000 – $35,000

Security is paramount in fintech applications. Implementing biometric verification (like fingerprint or facial recognition) and MFA helps safeguard transactions and user data against unauthorized access.

Business ROI: Reduces fraud-related losses and enhances user trust, leading to higher adoption rates and retention.

Strategic Advantage: Builds a security-first brand image and improves compliance with PSD2 and financial data protection regulations.

5. Real-Time Transaction Monitoring & Alerts

Investment Range: $12,000 – $30,000

This feature enables users to view real-time transaction updates, receive instant payment notifications, and monitor suspicious activity. It often integrates with fraud detection systems powered by AI/ML.

Business ROI: Enhances customer satisfaction and reduces support costs by providing transparency and proactive risk management.

Strategic Advantage: Adds a layer of trust and security, making your platform a preferred choice for security-conscious users and enterprises.

6. Recurring Payments & Scheduled Transfers

Investment Range: $17,000 – $24,000

Enables users to set up automated bill payments, subscription renewals, or scheduled transfers directly from their bank accounts. This increases app engagement and recurring transaction volume.

Business ROI: Drives predictable revenue through recurring transactions and improves customer lifetime value.

Strategic Advantage: Expands the use cases beyond one-time payments, appealing to businesses with subscription-based models.

7. Fraud Detection & Transaction Security

Investment Range: $18,000 – $32,000

Advanced security features such as behavioral analytics, AI-driven risk scoring, and multi-factor authentication help prevent fraudulent transactions and unauthorized access.

Business ROI: Reduces fraud-related losses, enhances user trust, and improves platform reputation.

Strategic Advantage: Differentiates the app as a secure payment solution, essential for B2B partnerships and merchant adoption.

8. Multi-Currency & Cross-Border Payments

Investment Range: $12,000 – $22,000

Supports international transactions with multiple currencies, exchange rate conversions, and compliance with global standards like PSD2 in Europe or UPI in India. This widens the app’s usability across different regions and user bases.

Business ROI: Unlocks access to global markets and increases transaction volumes from cross-border commerce.

Strategic Advantage: Makes your app a go-to payment solution for international merchants and businesses looking for borderless banking.

9. Dashboard with Settlement Management

Investment Range: $10,000 – $18,000

Provides both users and merchants with dedicated dashboards. Users can track payments, refunds, and transaction history, while merchants can manage settlements, refunds, and analytics. This dual dashboard improves transparency and simplifies financial management for all stakeholders.

Business ROI: Increases adoption by offering operational clarity to both users and merchants, reducing disputes and improving trust.

Strategic Advantage: Strengthens your platform’s overall usability, making it a reliable solution for both end-users and business partners.

How Pay-by-Bank Apps Generate Revenue & Value?

Pay-by-Bank apps are transforming digital payments by connecting users’ bank accounts directly to merchants. Understanding the pay by bank app cost helps businesses plan effectively while maximizing value for banks, businesses, and users.

1. Transaction Fees

These apps typically charge a small fee per transaction, either to merchants or end-users. This model ensures steady revenue for the platform without adding friction to payments.

2. Merchant & Enterprise Subscriptions

Businesses can subscribe to premium services such as advanced analytics, settlement reports, fraud detection, and loyalty programs, providing recurring revenue streams for the app.

3. Value-Added Services

Features like instant settlements, cross-border payments, multi-currency support, and reward programs enhance user engagement while enabling additional revenue from service usage.

4. Partnerships & Integrations

Pay-by-Bank apps can collaborate with fintech firms, banks, and e-commerce platforms. These partnerships can generate referral fees, co-branded services, or shared transaction-based revenue.

How IdeaUsher Will Help to Build Your Pay-by-Bank App

IdeaUsher specializes in developing secure, scalable, and feature-rich Pay-by-Bank apps. By carefully managing pay by bank app cost, our team combines technical expertise with industry insights to deliver solutions that meet regulatory standards, ensure seamless transactions, and enhance user engagement.

1. Consultation & Requirement Analysis

We conduct detailed consultations with you to understand business goals, target users, and compliance requirements. Our developers translate these insights into a robust app roadmap.

2. Core & Advanced Feature Implementation

Our developers build both essential MVP features (token management, payments, KYC) and advanced modules (multi-currency support, user & merchant dashboards) to ensure the app is market-ready and scalable.

3. Security Integration

We implement strong encryption, two-factor authentication, anti-fraud systems, and other security protocols to safeguard user data and transactions, ensuring trust and compliance.

4. UI/UX & App Development

Our team designs intuitive interfaces for both users and merchants, ensuring a smooth onboarding experience, seamless payments, and high engagement.

5. Testing, Deployment & Maintenance

IdeaUsher’s developers perform rigorous testing for functionality, security, and performance, followed by deployment on all platforms. We also provide ongoing support, updates, and scaling strategies.

6. Compliance & Regulatory Alignment

We ensure that your app aligns with regional and international banking regulations, PSD2, and other compliance standards, reducing risk and enabling faster approvals.

Conclusion

Building a pay by bank app involves careful consideration of development costs, features, and security requirements. The investment ensures a reliable and user-friendly platform that streamlines transactions, reduces operational overhead, and enhances trust between merchants and users. Understanding the cost components, from design and development to testing and deployment, helps organizations plan effectively and allocate resources wisely. A well-developed pay by bank app not only meets current payment expectations but also positions businesses to adapt to future digital payment trends while delivering long-term value.

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