SHOPPERS are being warned about using a quick online payment option that could see you lose thousands of pounds
This ‘pay by bank’ option is used at online checkouts by popular online retailers such as WHSmith, Funky Pigeon, Just Eat and Ryanair.


It allows customers to pay for online shopping directly from their bank account without the need for a credit or debit card.
But experts have warned that this payment option offers no protection if things go wrong – and you could be missing out on cashback too.
Most of the major UK banks, such as Natwest, HSBC, Barclays and Lloyds and Santander, are signed up to the scheme.
If you opt to use PbBa at an online checkout, you’ll need to select your bank and then login via biometrics or your password to complete the purchase.
Once in your bank app, you can view your balance before you pay and see it updated immediately afterwards.
Unlike online card transactions, there is no need to enter your long card number, CVV number, card expiry date, home address and contact details.
Sounds great, right? In theory, this payment option is quick and easy, but paying this way could mean you don’t benefit from vital protection afforded to debit and credit card purchases.
This is because PbBA transactions are registered as bank transfers, not card payments.
Andrew Hagger of Moneycomms said: “Pay by bank app may seem like a quick and handy piece of smart phone tech when you’re shopping but consumers should be aware that these transactions are treated as bank transfers which means you won’t get protection from Section 75 for credit cards or chargeback on debit card payments.”
This lack of protection means that if something goes wrong – like your item never turns up or isn’t what you ordered – it can be much harder to get your money back.
Section 75 of the Consumer Credit Act 1974 applies to purchases costing between £100 and £30,000 and makes the credit card company equally liable with the seller for providing a refund or compensation if something goes wrong.
Chargebacks offer similar protection for debit card purchases, allowing customers to request refunds through their bank.
The method is cheaper for retailers as they don’t have to pay transaction fees.
On smaller transactions, such as takeaways, it would only be a small amount of money at risk – but for bigger payments, such as holidays, then it could leave travellers unprotected if something goes wrong.
Experts also warn that using PbBa could mean missing out on free money.
Money Expert director Liz Hunter says: “If you pay by bank transfer, and don’t use your debit or credit card to make a purchase, then you could be missing out on rewards and cashback that your bank may offer.
“To receive certain rewards or cashback, providers will need you to pay using your debit card, credit card or Apple or Google Pay.
“As long as the cards connected to your Apple or Google pay are linked with accounts that receive cashback or rewards, then you should still receive cashback or rewards from purchases made with participating retailers.”
SIX TIPS TO STAY SAFE ONLINE
WHICH? has shared its six tips for banking customers to stay safe online.
These include:
- Protect your mobile: Having your phone stolen needn’t put your money at risk. Add a unique Pin to your Sim card, register for Google’s Find My Device or Apple’s Find My iPhone, and disable preview notifications. These flash up messages even when your phone is locked.
- Don’t use an out-of-date device: Updates contain security patches for new vulnerabilities, so if you bank online, don’t use a device that’s no longer supported.
- Choose strong, unique passwords: Avoid repeat or simple passwords – too many banks have failed to block this. Use a password manager if you struggle to remember them.
- Keep your phone and bank cards separate: Never leave your mobile phone and bank cards unattended together – a thief could pass security checks when armed with both.
- Check your social media profiles for details: Remove personal data (email, date of birth, phone numbers) from online profiles, as this raises your risk of identity theft. Only accept friend requests from people you know. What you put online is public, so never use anything that’s out there in a password or security question.
- Act quickly: If you spot an unauthorised payment or changes you don’t recognise, report it immediately. Many banks let you freeze your debit card via their app, or they offer a 24/7 helpline to report lost and stolen cards.