Discover Bringing Pay-By-Bank Payment Option to US

Discover Financial Services is partnering with Buy It Mobility Networks Inc. (BIM) to allow U.S. merchants to offer their customers the option to pay for their purchases from their bank accounts without a credit or debit card, according to a report Monday (Feb. 14) from The Wall Street Journal.

The formal announcement is expected later this week, the report said.

Buy It Mobility’s technology allows consumers to pay directly from their checking accounts using merchants’ apps, an approach that’s popular in Asia, with Alipay and WeChat Pay among the pioneers.

Discover’s network is accepted in about 11.8 million U.S. merchant locations, according to 2020 Nilson Report data. It was used in 2% of card transaction on major U.S. networks that year, compared to 65% for Visa.

“It’ll give us at Discover another arrow in the quiver,” said Jason Hanson, senior vice president of global business development at Discover, in the WSJ report.

BIM, which was part of a now-defunct mobile wallet effort by several large merchants several years ago, will offer lower fees for merchants on transactions that travel across the Automated Clearing House (ACH) to connected bank accounts, meaning shoppers will pay less in that case as well.

Shell and Phillips 66 are among the companies that use BIM technology at checkout, with some customers paying 25 cents less a gallon than those who use debit or credit cards. Grocery chains, pharmacies and quick-service restaurants have expressed interest in BIM’s technology but have been slow to adopt it because of technical complications, BIM Chief Executive Adam Frisch told WSJ.

Related: BNPL Firm Splitit Partners With Discover Network

In October, Discover welcomed buy now, pay later (BNPL) firm Splitit to its network, in a move that lets merchants allow customers to use their Discover, Diners Club card or any other card on the Discover network at checkout in conjunction with Splitit to spread payments over time.

Shoppers can continue earning credit card rewards, while getting to pay installments without any additional fees or interest from Splitit.