Token.io unveils Account on File to streamline Pay by Bank

Token.io has launched a new Pay by Bank feature, Account on File, which stores a returning payer's chosen bank and account and shows it by default at checkout.

The release is aimed at helping payment service providers (PSPs) and merchants in the UK and Europe reduce friction in account-to-account payments and improve checkout completion rates. Pay by Bank has grown as an alternative to cards in online commerce and other digital payment journeys, particularly when consumers can approve transfers through their banking app.

Account on File mirrors the familiar "Card on File" model. It stores the consumer's preferred bank and account for future transactions, so returning users see their previous selection pre-populated when they pay again.

Token.io says the change can remove up to two steps from a typical Pay by Bank flow. Fewer steps typically mean fewer clicks and fewer abandoned transactions, persistent issues for merchants trying to reduce checkout drop-off.

Checkout changes

Pay by Bank journeys can span several screens, including bank and account selection, before a customer confirms payment through strong authentication in their banking environment. Account on File streamlines the early part of that experience by reducing repeated selection for returning customers.

The feature targets use cases where customers make frequent payments, and speed is critical, such as eCommerce purchases and account top-ups. Token.io reports that additional steps in these scenarios can lead to conversion losses.

"For high-frequency transaction scenarios, such as eCommerce purchases or account top-ups, every extra step costs you customers," said Sam French, Token.io's Director of Product.

Token.io says Account on File can make Pay by Bank feel closer to a one-tap option for returning users, helping merchants improve conversion while keeping payments routed directly from bank accounts rather than through card rails.

"With our new Account on File feature, Pay by Bank can become a one-tap experience for returning payers, driving higher conversion rates for merchants, while giving consumers a secure, familiar way to pay straight from their bank accounts," French said.

Merchant economics

Account-to-account payments can appeal to merchants due to settlement and processing economics relative to certain card transactions, though outcomes depend on payment method, geography, and provider arrangements. Token.io links its Pay by Bank approach to faster settlement and lower processing costs, and highlights cash-flow benefits from quicker fund movement.

Token.io also positions the feature as a way to improve the customer experience without merchants having to hold sensitive bank account data in their own environments-an important consideration for payment acceptance, where merchants typically aim to reduce exposure to sensitive credentials while keeping checkout fast.

Tokenisation focus

Token.io says Account on File uses tokenisation, replacing sensitive account details with a non-sensitive token. The token references the user's bank account without exposing the underlying data.

Token.io says this means merchants do not need to store consumers' sensitive data directly when using the feature. That aligns with a broader payments trend in which tokenisation is widely used to limit the spread of high-risk credentials.

Token.io frames security as part of the trade-off that has historically challenged Pay by Bank adoption at scale. Consumers may value the security and control of bank transfers, while merchants want checkout experiences that match the speed and familiarity of stored card payments.

PSP adoption

Token.io is pitching Account on File as a differentiator for PSPs offering Pay by Bank. It cites its own research suggesting 90% of PSPs offer or plan to offer Pay by Bank in the near term, pointing to a market where access is becoming standard, and competition is shifting to user experience, conversion, and operational features.

The Account on File is available via Token.io's latest API. Token.io says this allows PSPs and merchants to add the feature without a long build cycle and suggests it can be rolled out across multiple merchants and payment journeys once integrated at the PSP level.

Token.io sells Pay by Bank infrastructure to banks, fintechs, platforms, and payment companies. It counts Mastercard, ACI Worldwide, and Global Payments among its partners, as well as three of Europe's five largest financial institutions, according to the company.