Should small businesses switch to Pay by Bank? A practical decision guide

Introduction

If you run a small business, you’ve likely asked some version of this question:

Should I switch away from card payments?

With the rise of Pay by Bank, that question is becoming more common. Lower fees and faster settlement sound compelling. But switching payment methods is not just about cost, it affects how you operate and how your customers pay.

This guide answers the question directly:

When does Pay by Bank make sense, and when does it not?

The wrong way to think about switching

Most businesses frame the decision like this:

• Is Pay by Bank better than cards?

That’s the wrong question.

Cards are not going away, because they are familiar, fast, and widely accepted.

The better question is:

Where does Pay by Bank improve your business, and where does it not?

This is an optimisation decision.

When switching makes financial sense

There are specific scenarios where Pay by Bank delivers a clear advantage.

Higher-value transactions

Card fees scale with value. A £500 payment costs the merchant significantly more to process than a £50 payment.

Pay by Bank removes or reduces percentage-based fees, so the savings increase as transaction value increases.

If you regularly take payments above £50–£100, the difference becomes significant.

Tight margins

If your business operates on thin margins, payment costs are not trivial. Reducing processing fees can directly improve profitability without increasing prices or volume.

Remote or invoice-based payments

Taking card payments over the phone or via manual entry is:

• slower;
• more error-prone;
• often more expensive.

Pay by Bank links simplify this process and remove the need to handle card details.

Cash flow matters

If you rely on fast access to funds:

• payroll;
• stock purchases;
• supplier payments;

then settlement speed becomes critical.

Pay by Bank typically settles faster than cards, often instantly or same-day.

When switching does not make sense

This is where most content avoids being honest. It matters.

Very low-value transactions

If your average transaction is £3–£10:

• card fees are already small in absolute terms;
• speed and familiarity matter more than marginal savings.

In these cases, cards remain highly efficient.

Impulse or convenience-driven purchases

Retail environments where speed is everything:

• quick taps;
• minimal friction;
• no behavioural change.

Customers will default to cards.

Reward-driven customers

Some customers actively prefer cards because of:

• points;
• cashback;
• credit.

You are unlikely to change that behaviour.

What actually changes if you adopt Pay by Bank

This is where decisions often stall. Businesses assume disruption. In practice, very little needs to change. You are not replacing your existing setup. You are adding an option.

Typical additions include:

• payment links for remote transactions;
• QR codes for in-person payments;
• a Pay by Bank option at checkout.

Your card setup remains in place.

What does not change

Equally important:

• you do not lose card acceptance;
• you do not need to retrain customers completely;
• you do not need to rebuild your systems.

This is an incremental change, not a rebuild.

A hybrid model could be the best approach

The most effective approach is not “switching”.

It is using both, deliberately.

A practical model looks like:

• use Pay by Bank for higher-value or remote payments;
• keep cards for speed and convenience-led transactions.

Over time, this shifts your blended cost of payments downward without introducing friction.

The commercial impact

The benefit does not depend on full adoption.

What matters is share of checkout, the proportion of your total payments that flow through lower-cost methods such as Pay by Bank.

A small shift in that mix can have a disproportionate impact on total fees.

Take a simple example. A business processes £50,000 per month across 500 payments, with card fees at 1.5% + 20p.

• Total card cost (100% cards): ~£850 per month.

Now introduce Pay by Bank for just part of that volume.

If 30% of payments move to Pay by Bank:

• Card volume falls to £35,000;
• Card fees drop to ~£595;
• Pay by Bank costs remain minimal (for example, £9.99 + VAT with Wonderful).
• New total cost: ~£605;
• Monthly saving: ~£245;
• Annual saving: ~£2,900.

At 50% share of checkout:

• Card fees fall to ~£425;
• Total cost: ~£435;
• Annual saving: ~£5,000+.

The key point is that savings scale with mix, not replacement.

This reflects how adoption actually happens in the UK. Open Banking has surpassed 13 million users, with usage concentrated in specific scenarios such as bill payments, e-commerce and account-to-account transfers¹. Businesses typically introduce Pay by Bank alongside cards and increase usage over time based on where it delivers the most value².

For most small businesses, the practical approach is straightforward:

• shift higher-value payments first;
• use Pay by Bank for remote or invoice payments;
• allow share of checkout to grow naturally based on customer behaviour.

You do not need universal adoption to materially reduce payment costs. You need targeted adoption in the areas where fees are highest.

How to start without disruption

The simplest way to introduce Pay by Bank is to:

1. Start with one use case (for example, invoices or higher-value payments);
2. Offer it alongside cards, not instead of them;
3. Observe customer behaviour and expand gradually.

No forced change. No risk to existing revenue.

CEO perspective

“Most small businesses don’t need to switch payment methods completely. They just need to use the right one in the right place. Pay by Bank works best where costs matter most, and that’s where we see the biggest impact.”
— Kieron James, CEO and Co-Founder, Wonderful Payments

Conclusion

The question is not whether Pay by Bank replaces cards. It doesn’t. The real question is:

Where can it improve your business today?

For many UK small businesses, the answer is clear:

• reduce costs on higher-value payments;
• improve cash flow where it matters;
• keep everything else running as it is.

Think less about this being disruption. It is just a better way to get paid.

Frequently asked questions

Do I need to stop accepting cards to use Pay by Bank?

No. Most businesses use both. Pay by Bank is added alongside existing payment methods.

Will customers actually use Pay by Bank?

Adoption is increasing, particularly for higher-value and remote payments where convenience and cost matter.

Is it difficult to implement?

No. Most providers offer simple options such as payment links, QR codes, and integrations with existing systems.

What is the biggest benefit?

For most small businesses, it is a combination of:

• lower payment costs;
• faster access to funds;
• simpler payment handling for certain use cases.