The news: Verizon customers can now pay-by-bank through Trustly in Verizon’s brick-and-mortar stores.
How it works: Previously, retailers have struggled to make in-store pay-by-bank options a viable competitor to cards and mobile wallets.
With Trustly’s open banking services, Verizon customers can use the phone they’re buying to enroll in pay-by-bank to pay for the phone itself and their first monthly phone bill.
Payment preference: Verizon wants to encourage customers to adopt pay-by-bank payments to help avoid costly interchange fees from credit cards.
So far, Verizon has offered discounts to customers for enrolling in pay-by-bank to encourage use, which has increased its popularity with Gen Zers and millennials, per a PYMNTS report.
Payment pioneer: Verizon is an early adopter of in-store pay-by-bank, and other retailers may try to look to it as a model for getting their own initiatives off the ground.
In a PYMNTS and Trustly study, 91% of merchants said they wanted to offer the payment option, but 78% were concerned about implementation costs.
For a powerful retailer like Walmart, the cost to ship a new payment type is worth it for the interchange they could save. It was reportedly interested in enabling the Federal Reserve’s instant payment system at checkout.
Our take: As long as the cost of accepting credit cards remains sizable, merchants who have the means to dodge fees will find ways to make pay-by-bank accessible.
Verizon is in the unique position of already possessing many consumers’ banking information through monthly billing. Making pay-by-bank available in store may not be as easy for retailers who would have to establish those banking connections from scratch at the point-of-sale.
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