Walmart's 'Pay by Bank' Challenges Card Networks
Walmart is rolling out a new “Pay by Bank” option, a move designed to bypass traditional card networks and save millions in service fees. By enabling direct account-to-account (A2A) payments, the retailer is tapping into the growing merchant appetite to lower costs, directly challenging the interchange-dependent economics of card issuers.
Walmart's new instant payment capability is powered by Fiserv's NOW Network, which integrates with The Clearing House's RTP network and the Federal Reserve's FedNow service. This move upgrades their previous "Pay by Bank" option, which used slower ACH rails that took days to settle, into a real-time transaction system. The primary driver for Walmart is bypassing credit card interchange fees, which average 2.24% of a transaction and represent a significant cost for the retailer. This directly challenges the revenue model of issuing banks, as interchange fees are used to fund fraud prevention, infrastructure, and cardholder rewards programs. The underlying real-time payments infrastructure is rapidly maturing, making such large-scale retail adoption feasible. In Q2 2025, The Clearing House's RTP network handled a daily value of $481 billion, while FedNow's volume grew over 400% year-over-year. With network participation for FedNow and RTP reaching over 1,400 and 1,000 institutions respectively, and transaction limits increasing to $10 million, the rails are now robust enough for significant commercial and B2B use cases. Secure customer authentication for the service relies on open banking principles, facilitated by Fiserv's AllData platform. This platform integrates with data aggregators like Plaid, MX, and Akoya to securely link and authenticate a customer's bank account credentials, removing the need for manual entry of routing and account numbers. This shift toward consumer-permissioned data sharing is gaining traction, with an estimated 100 million U.S. consumers having already authorized third-party access to their financial accounts. This direct A2A payment flow fundamentally alters the fraud landscape, mitigating risks like card-not-present fraud but introducing others, such as account takeover. In response, financial institutions are increasingly deploying AI-driven fraud detection. These systems analyze behavioral patterns, transaction velocity, and device data in real-time to identify anomalies and assign risk scores to transactions, moving beyond static rules to combat more sophisticated fraud techniques. From a leadership perspective, driving adoption of "Pay by Bank" is a classic case of influencing without authority. Product leaders at Walmart must convince consumers to change ingrained behaviors and forgo valuable card rewards. This requires building a compelling value proposition, potentially through new incentives, and aligning a complex ecosystem of banking and technology partners toward a shared strategic vision. This initiative is part of a broader trend of bypassing traditional payment rails, with institutional adoption of stablecoins for settlement as a parallel development. Regulatory clarity, such as the EU's MiCA framework and the proposed US GENIUS Act, is paving the way for stablecoins to become a foundational layer for 24/7 global commerce, with transaction volumes already exceeding a trillion dollars monthly.
