Canadian retailers are navigating a more complex operating environment than ever before. Rising production costs and supply chain constraints are tightening margins, while shoppers are becoming more selective about how and where they spend.
At the same time, expectations for online experiences continue to climb. Customers want fast, flexible and secure ways to pay. For merchants, that means every part of the payment experience is under pressure to ensure it delivers security and convenience for customers, while helping control costs behind the scenes.
This tension is pushing retailers to rethink how their payment strategies support both growth and efficiency. It’s no longer enough for digital payments to simply “work”: They need to actively drive better outcomes for the business.
One such solution? Pay by bank.
Ready to accept payments with Konek?
Talk to a specialistWhat is pay by bank (a.k.a. account-based payment or account-to-account payment)?
Most online transactions in Canada at present are card-based payments, whether the card number is typed in at checkout or stored from past purchases. Account-based payments offer the option to pay directly with money from your bank account — often a chequing and/or savings account — to complete online purchases.
Pay by bank allows shoppers to use their secure online banking credentials (from their financial institution, without creating a new password) to directly pay from their chosen available account, such as a chequing or savings account. There’s no need for a physical card, and the flexibility of being able to choose the account increases users’ control over their finances.
What are the benefits of pay by bank for merchants?
1. Low costs and fees
Most importantly for many retailers — account-based payments typically offer a lower cost of payment acceptance when compared to card-based payments.3 This can translate to savings for merchants. Every cent you aren’t sacrificing in charges and fees is a cent you can add to your bottom line.
Interac Direct, for example, is available at a lower acceptance cost than many competitive payment methods. Available exclusively on the Konek platform, it’s a digital payment solution that allows consumers to pay for purchases directly from their chequing, savings and line of credit accounts.
2. Meeting customer expectations — and avoiding cart abandonment
Canadian retailers know that winning in the marketplace isn’t just about having the best products — it’s also about making the shopping experience as seamless as possible. A key part of creating that seamless experience is giving customers the freedom to choose how they pay.
And consumers do care about flexibility: According to research from Canada Post, two in five consumers surveyed said they’d be more likely to shop with a specific retailer if it offered a variety of payment methods.4 Conversely, according to an Adyen retail report, 55 per cent of shoppers abandon purchases if they can’t pay using their preferred methods.5
Merchants agree: Eighty per cent of a select group of retailers told a joint Interac-Retail Council of Canada (RCC) survey that offering both account-based and card-based payment options improves the customer experience when shopping online.6
To avoid losing out on sales, online retailers can cover their bases by offering multiple payment methods at checkout, including pay by bank.
The upshot: With pay by bank, merchants can make multiple payment methods available at online checkout, reducing the risk of losing customers at the final step of the buying journey.
3. Attracting new customers
With account-based payments, merchants can sell to e-commerce customers who don’t have a credit card, or who aren’t comfortable making online purchases with their card due to security or budget concerns. Many of these will likely be younger consumers, including those who are under 18 and have a bank account but not a credit card.
And as Gen Z payment habits change, offering pay-by-bank options at checkout can help retailers improve customer loyalty.
Merchants see a future for pay by bank, too. Seventy per cent of retailers in the RCC-Interac survey agreed that it fulfils an unmet need for Canadian consumers, and 80 per cent predict that providing more payment options will attract a broader and more diverse customer base.7
4. Security is built in
Data protection is a leading factor that influences consumer trust.8 According to Navigator research, 85 per cent of Canadians surveyed in 2024 indicated they are worried about data breaches, with 66 per cent reporting increased concern compared to three years prior.
Data breaches on the rise, so retailers need to ensure security measures are in place to help protect their business and customers’ data. With Konek, for example, the financial institution handles authentication and payment consent, meaning financial data stays with the bank rather than passing through a merchant’s systems.
5. Avoiding chargebacks and NSFs
Chargebacks are a costly and complex challenge for Canadian merchants and the number of chargebacks globally is expected to grow 37 per cent from 2025 to 2029.9
Each chargeback or NSF carries direct and hidden costs, including chargeback fees, lost merchandise, internal resources and potential penalties from card networks.
Konek conducts a real-time verification of funds during authorization to eliminate NSF risks. And because these transactions are push-based and authenticated directly through bank apps, they also minimize the risk of chargebacks — a major nuisance for retailers.
Konek brings pay by bank, built for Canada
Powered by Interac and backed by Canada’s leading financial institutions, Konek is a made-in-Canada payment platform that offers an account-based payment option. In addition to credit options, Konek allows shoppers to check out using funds from a chequing or savings account with a participating Canadian financial institution. (The bank provides security and authentication for the transaction.) Its purpose is to expand the range of choice over payment options that Canadians have when they pay for online purchases.
With Konek, merchants operating in Canada can give customers a pay-by-bank option built on the infrastructure Canadians already trust. With seamless integration and enhanced fraud protection, it’s a solution that’s ready for merchants who want an edge in the ever-competitive field of e-commerce.
