Plaid, a fintech leader in bank account connectivity, has launched a new solution called “Pay by Bank for Bill Pay” designed to increase ACH payment adoption and reduce processing costs for billers.
Why it matters: With card processing fees eating into profits, billers are seeking more cost-effective payment methods. ACH payments can save up to 40% in processing costs compared to cards, but adoption has been hindered by poor user experiences.
By the numbers:
- Up to 80% higher payment success rates with Plaid’s solution
- Up to 80% decrease in NSFs on first payments for some early customers
- More than 1 in 3 U.S. adults with a bank account have connected via Plaid
The big picture: As consumers increasingly manage their finances digitally, billers need to offer seamless, secure payment options that reduce costs while improving the customer experience.
How it works: Plaid’s Pay by Bank solution integrates directly into biller payment flows, allowing customers to easily connect their bank accounts for payments.
- Users can search for and select their bank without leaving the payment page.
- Plaid’s network enables one-click experiences for returning users, boosting conversion.
- The solution includes both online banking authentication and traditional account/routing number validation.
Between the lines: Plaid’s risk engine, Signal, uses machine learning to predict and prevent payment failures:
- Analyzes network behavioral data to detect potential fraud in real-time
- Provides risk scores and customizable rules to flag suspicious transactions
- Offers insights on optimal times to retry failed payments, reducing churn and support inquiries
The bottom line: By combining improved user experience with advanced risk assessment, Plaid aims to make ACH payments more reliable and widely adopted than traditional card payments for recurring bills.
What to watch: Early adopters in telecommunications, property management, insurance, and automotive industries are already implementing the solution. Its success could signal a significant shift in how consumers pay their bills and how billers manage payment processing.
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