Four unexpected ways Pay by Bank boosts customer lifetime value

Consumer behaviour is shifting faster than most merchants realise. Across Europe, Pay by Bank methods—where customers pay straight from their bank—are becoming everyday habits. iDEAL, Swish, BLIK and MB WAY are leading the way, driven by a growing preference for payments that are instant, intuitive and trusted. And according to Juniper’s A2A Payments Market: 2025–2030 report, Pay by Bank transactions are forecast to grow by more than 80% by 2030, clear evidence that this shift is accelerating.

Many payment leaders still treat customer lifetime value (CLV) as something owned by marketing or product. But your payment method now plays just as big a role.

When payments are fast, verified and free of friction, customers convert more, return more and stay longer. Used well, Pay by Bank becomes a driver of trust, relevance and retention. The foundations of CLV.

Here’s how it reshapes customer relationships.

1. Reduce fraud without adding friction for genuine customers

Fraud isn’t just a merchant problem. It’s one of the things consumers worry about most when they pay.

The UK Payment Systems Regulator’s latest research shows that 41% of consumers are concerned about fraud, with anxiety even higher among people who are more financially stretched. When trust feels fragile, every payment interaction carries more emotional weight than businesses often realise.

This is why reducing fraud and reducing friction can’t be treated as opposing goals. Consumers want protection, but they also expect simplicity. And although many feel payments “work well enough,” security remains a top priority, especially for higher-value transactions. The challenge is that legacy systems often introduce invisible friction. They still process payments, but they make it harder to access the real-time data needed to strengthen security without slowing customers down.

Pay by Bank helps square this circle. Because customers authenticate directly with their bank, merchants receive bank-verified identity and account-ownership data (with permission). This means you can:

• Confirm person, account and identity data in real time
  
• Spot synthetic identities or account takeovers earlier
  
• Remove unnecessary step-ups for legitimate customers who want a smooth, trustworthy journey
  

Combined with a Pay by Bank provider that has a large network of banks and merchants, this data leads to fewer losses and fewer false positives, paired with an experience that reassures users instead of burdening them. When nearly half of consumers are actively thinking about fraud risk, offering a safer payment that doesn’t slow them down becomes a powerful driver of trust, loyalty and long-term value.

2. Make smarter decisions with real-time financial signals

Most merchants still operate with a partial view of their customers: historical data, generic rules, blunt risk thresholds. Better than nothing. but far from precise.

Every Pay by Bank interaction can surface live financial signals such as spending behaviour, income patterns, balance indicators and affordability markers. Used responsibly, these insights help you:

• Tailor limits, approvals or incentives to each customer’s financial reality
  
• Reduce over-extension while still saying “yes” to more good customers
  
• Identify and reward your highest-value users early in the relationship
  

Instead of guessing which customers will stay, spend or churn, you make decisions grounded in transparent, verified data. That shift — from generic journeys to data-driven relevance — translates directly into higher conversion, stronger engagement and longer relationships.

3. Improve payment collection and reduce involuntary churn

For subscription, telco, utility and financial services businesses, churn often looks like a product problem. But a surprising percentage is simply… payment failure.

Cards expire. Devices change. Billing cycles collide with low balances. And every failed retry becomes an unnecessary off-ramp for customers who fully intended to stay.

By combining Pay by Bank with intelligent charging and direct-from-bank mandates, merchants can:

• Prefill bank details and create mandates in just a few clicks
  
• Use machine learning to schedule charges for the most likely success window
  
• Avoid failures caused by expired cards, mistyped numbers or outdated details
  

These aren’t marginal improvements. Reducing involuntary churn extends the lifespan of customers you’ve already spent money to acquire — and increases revenue predictability, something finance leaders value deeply.

New Open Banking–powered recurring payment standards emerging in the UK will push this further. As highlighted in A2A Payments Market: 2025–2030 from Juniper Research, these standards allow customers to authorise ongoing payments within agreed limits, removing card expiry risk entirely and offering clearer visibility and control. With regulators preparing a phased roll-out from 2025–26, Pay by Bank is becoming an even more reliable way for customers to stay on track, strengthening CLV without adding complexity.

‍4. Turn payment savings into stronger loyalty and higher CLV

The most exciting aspect of Pay by Bank isn’t just the reduced transaction cost — it’s what merchants can do with those savings. Many retailers already run loyalty programmes designed to boost frequency and retention. But rising card fees limit how generous these programmes can be.

Pay by Bank changes that equation. When each transaction costs less, merchants can reinvest part of those savings back into the customer — without hurting margin. Some choose to double rewards points for customers who pay by bank, or offer small but meaningful everyday savings that compound over time.

We’ve seen this dynamic succeed. A major merchant used Pay by Bank to eliminate top-up fees entirely for their Cashback Card. The impact:

• Customers switched organically 
• Higher retention and more active usage, with zero marketing spend
  

The insight is clear:
When paying by bank becomes the smarter, cheaper option, merchants can turn savings into rewards, and rewards into higher CLV.

The bigger picture: CLV grows when payments get smarter

Across Europe, consumers are already choosing Pay by Bank. Global adoption curves are accelerating. Regulatory shifts are unlocking new capabilities. And the merchants that move early will be best positioned to serve customers who increasingly expect payments to be instant, intuitive and secure.

Paired with real-time bank data, Pay by Bank offers:

• Better trust, fewer false declines
  
• Better decisions, richer signals for smarter offers
  
• Better retention, fewer failed payments
  
• Better loyalty, savings reinvested into customer value
  

These are the foundations of CLV, and they don’t require a major transformation, just a willingness to rethink the role payments play in customer relationships.

When paying becomes effortless and predictable, customers stay longer.
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And when they stay longer, CLV grows quietly in the background, powered by payment experiences that simply work.

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