Exclusive: Verizon and Trustly Unlock Pay by Bank at Retail

PYMNTS Intelligence’s research indicates that pay by bank is poised for a wider embrace in the United States.

In research conducted jointly with Trustly, consumer surveys show that interest in using pay-by-bank options increases markedly with younger generations and when incentives such as discounts are added to the mix. In fact, interest leaps by 72% when pay-by-bank choices are coupled with discounts or cash-back offers.

Verizon has been leveraging pay by bank and open banking for several years. Customers have been able to pay their wireless or internet bill with their bank account as a one time payment, or more commonly by enrolling in autopay using Trustly pay by bank. Trustly worked closely with Verizon to design a user experience that makes it easy for customers to choose their bank, sign in, and make the payment.

But in a new development, last month (May 21), Trustly and Verizon have collaborated to bring pay by bank to the telecom giant’s brick-and-mortar stores. Kerrie Larpenter, director of enterprise customer success at Trustly, and Attie Muse, senior director of payment strategy and operations at Verizon, gave PYMNTS an exclusive look at the new initiative.

“Pay-by-bank adoption has accelerated in the last few years,” Larpenter said. “Many consumers are already using open banking solutions, often without even realizing it, but there’s still a gap in awareness when it comes to using it for everyday transactions. Adding pay by bank as an option in a retail setting adds the payment option in a trusted, secure environment. When designing the customer experience flow for retail, we worked closely with the Verizon team to leverage the user experience successes generated by our bill pay solution.”

A Natural Progression

Muse said that as of February 2021 Verizon has been directing consumers to use pay by bank to get monthly discounts on their phone lines, so the move to introduce  it in its retail stores has been a natural progression.

Customers visit the stores, she said, “with their primary reason being to purchase devices, upgrades or buy accessories for their phones.”

But as Muse told PYMNTS, before the new announcement with Trustly, “enrolling in autopay and making payments with your bank account wasn’t an easy process. This partnership has enabled our customers to link pay by bank for their device and enroll in autopay in a single transaction.”

“We deployed pay by bank for bill pay to ultimately reduce the cost of payment acceptance,” Muse said. “By using Trustly to remove the friction of traditional ACH, like the manual entry of banking credentials, we made direct bank payments a more appealing option for customers. As for what’s next, we want to make it just as easy for our customers to use pay by bank for eCommerce when they walk into our retail stores.”

Muse offered the scenario where customers walk into a Verizon store, and while interacting with a sales rep, are “in control” of the phones’ set up and billing. When it comes time to transact, they can do so on their devices (rather than presenting a separate card) through the Trustly widget that enables them to enroll in pay by bank.

The one-step nature of the enrollment removes friction from the process that had historically occurred when Verizon customers paid with a card in-store, missed out on the autopay discount and then had to go online or through the Verizon app at a later time to enroll in autopay with bank funding.

The Wider Backdrop

Muse and Larpenter said that pay by bank’s appeal — and the attendant discounts and incentives — are especially attractive to Generation Z and millennial consumers as it ties into responsible budgeting.

For Trustly, Larpenter said, this collaboration with Verizon marks a significant development in bringing pay by bank from eCommerce into physical retail. “Verizon is one of the first merchants to actively incentivize pay by bank, making the simplified open banking payment even more beneficial to customers,” she said.

“So far, we’ve seen fantastic results. Verizon’s focus on the customer experience has created a model for how pay by bank can drive value in retail, setting the stage for broader adoption across other merchants.

“As we counsel and advise new and existing merchants, Verizon provides a gold standard of how important the blend of customer communication and customer incentive are to driving a significant shift in consumer behavior, with positive downstream impacts for the merchants,” Larpenter said.