A strategic partnership between global fintech leader Banked and stalwart bank National Australia Bank (NAB) is set to resurrect a long-dormant contender in the payments space: Pay by Bank powered by Australian Payments' (AP+) PayTo service.

This phoenix of the financial world not only promises to bring about faster and more secure payments, but also has the potential to change the way business is done in Australia.

While credit cards have long dominated retail, bank payments offer a compelling alternative - direct, frictionless transactions between a customer's bank account and a merchant's account, bypassing the need for a middleman altogether.

For merchants, the benefits of Payment by Bank are unquestionable, as it offers a more cost-effective solution that simplifies the payment process and has the potential to improve merchant profitability. It also offers enhanced security features, with built-in fraud protection and instant refunds to increase trust and reduce the risk of financial fraud.

The real power of Pay by Bank, however, lies in its potential to reshape the customer experience.

Pay by Bank gives customers complete control over their finances. With just a click or tap, funds are transferred directly from a secure bank account with a level of transparency and security unmatched by traditional methods.

This newfound control is not limited to transactions. Bank payments pave the way for innovative loyalty programs. Merchants can design programs that reward customers not with points or plastic cards, but with instant discounts or cash back deposited directly into their accounts. This will promote a more dynamic and personalized shopping experience, creating a win-win situation for both merchants and consumers.

Banked's partnership with NAB is particularly noteworthy, with Banked bringing its global expertise in the emerging account-to-account (A2A) payments space and NAB offering its established presence in the Australian market and its commitment to cutting-edge digital banking solutions. This blend of experience and influence creates a powerful force that will drive bank payments into the mainstream.

Of course, there will be challenges ahead.

Consumer education is critical. Changing established payment habits will require a concerted effort to highlight the benefits of bank payments. In addition, ensuring seamless integration with existing systems and fostering collaboration among all stakeholders within the financial ecosystem will be critical to widespread adoption.

Another obstacle lies in fragmentation. Currently, there is a proliferation of bank payment solutions, each with their own quirks and compatibility. This lack of standardization can confuse consumers and hinder widespread adoption. Industry-wide collaboration is essential to develop a unified standard for bank payments, which will ensure a smooth and seamless user experience across different platforms.

However, the potential rewards are undeniable. A thriving bank payments environment not only provides a more efficient and secure way to transact, it also fundamentally changes the relationship between consumers, merchants and financial institutions. With transparency, security and control at their core, bank payments have the potential to redefine the structure of business in Australia.

The phoenix is rising, and its fiery wings may shed new light on the future of payments.