Why UK Shopify Merchants Are Ditching Cards for Pay by Bank (and Why You Should Too)

Running a Shopify store in the UK right now? You’re probably feeling the squeeze—card fees eating into profits, funds taking days to clear, and cart abandonment haunting your analytics. We get it. But here’s the shift that’s quietly changing everything for UK Shopify merchants: Pay by Bank. This isn’t just another payment option. It’s open banking in action, where customers are paying directly from their bank account to your business, instantly, securely, and at a fraction of the cost of cards. And with 15.16 million UK adults now using open banking as of July 2025, it’s not a trend, it’s the new standard.

Let’s break down why businesses across the UK are making the switch to Pay by Bank, backed by real data, real wins, and zero fluff.

The real cost of cards for shopify merchants

You know the drill. Visa and Mastercard charge 1.5% to 3.4% per transaction, plus fixed fees that stack up fast. For a Shopify store doing £50,000/month, that’s £750–£1,750 gone before you even reinvest in ads or inventory. But it gets worse: delayed settlements mean waiting 2–3 days for funds, tying up your cash flow and forcing you to borrow or delay growth. And chargebacks? They’re a hidden killer, costing UK retailers over £500 million in disputes and reversals in 2024 alone, with each one draining £20–£100 in admin and recovery fees.

Now flip the script: Pay by Bank cuts fees to as low as 0.7%—up to 50% savings on transaction costs compared to cards. No delayed settlement charges, no chargeback headaches. So, you end up saving a whole lot just by adding Pay by Bank at checkout. No more bleeding margins. Just smarter payments. 

For a deeper dive on slashing these costs, check out our guide on the cheapest Shopify payment options.

Instant payouts = Instant growth

With cards, funds take 2–3 days to settle. But with Pay by Bank, money hits your account in seconds via Faster Payments. Restock inventory same-day. Launch flash sales without cash flow panic. One Shopify electronics store used instant settlements to double TikTok ad spend during Prime Day, and tripled ROI.

Over half of UK online shoppers (52%) say they’re less likely to return to a retailer after experiencing slow refund processes. Pay by Bank makes instant refunds a reality—for both you and your customers, boosting loyalty and repeat business. Learn more about how this seamless flow works right in your Shopify checkout.

Fraud? What fraud?

Card-not-present fraud cost UK retailers £500m+ in 2024. Chargebacks? A nightmare. Pay by Bank eliminates both.

• No card details shared
  
  
• Biometric confirmation in the customer’s banking app
  
  
• Zero chargebacks
  
  
• Fraud risk near 0%

It’s not just secure—it’s bank-grade. And that trust? It converts. Shopify stores report 15–20% higher completion rates on £75+ orders when Pay by Bank is offered. For tips on avoiding chargebacks entirely, see why Atoa tops our list of best Shopify payment gateways in 2025.

Open banking is booming and Shopify is ready

The UK leads the world in open banking. Here’s the proof:

• 15.6 million active users (July 2025)
  
  
• 31 million payments initiated in one month
  
  
• 70% YoY growth 
  
  
• 145 TPPs with a live-to-market open banking proposition

And for Shopify? Pay by Bank integrates in one click. No coding. No downtime. Just install the app, enable the button, and watch UK checkouts transform. Ready to get started? Our Atoa launch on the Shopify App Store walks you through it.

Yes, there’s a catch (but it’s tiny)

• Some customers still default to cards (familiarity)
  
  
• Best for UK domestic sales (pair with cards for international)
  
  
• Rare bank app glitches (less than 0.5% failure rate)

Pro tip: Offer both. Let customers choose. But make Pay by Bank the default for UK traffic.

Ready to add Pay by Bank to your Shopify store?

You don’t need tech skills or weeks of setup. Simply try Atoa’s Pay by Bank app, which is live in the Shopify App Store. This FCA-authorised platform is fully integrated, and takes less than 5 minutes to install.

Take a look at what the Atoa experience will look like on your Shopify store. 

The bottom line

Your Shopify store pinging money straight into your account like it’s 1999 and your mate just paid you back for the pizza. No card fees gatekeeping your profits. No “settles in 3-5 business days” nonsense. Just instant cash, grinning customers, and you doing a little victory dance every time someone checks out.

Shopify + Atoa’s Pay by Bank = the cheeky shortcut UK merchants have been waiting for. Cheaper than cards. Faster than spreading gossip. Smoother than a fresh jar of Nutella. The future of UK checkout isn’t knocking; it’s already inside raiding the fridge.

FAQs

Can I drop card payments entirely and just use Pay by Bank?

Not yet. While Pay by Bank brings major benefits, cards remain essential for broader reach, especially for international customers, or buyers who prefer wallets. A hybrid model often works best.

What happens if a customer’s bank isn’t available for Pay by Bank?

Always offer fallback options (card, wallet). Clearly communicate “most UK banks supported” so customers don’t abandon checkout.

Are refunds handled differently with Pay by Bank?

Yes. While fewer chargebacks occur, refund flows depend on how your provider handles them. Make sure your partner documents this process.

Does Pay by Bank make checkout slower or more complex?

No, if you select a provider with a plug-in or seamless flow, the experience can be faster than card entry (no CVV, no card-detail fields, direct bank authorisation).

Let’s talk in the comments: Have you tried Pay by Bank on Shopify yet?