Investment by HSBC in Token.io strategically confirmed

Investment by HSBC in Token.io strategically confirmed

The Pay by Bank (account-to-account, A2A) payment method in Europe is experiencing rapid growth, driven by regulatory changes like PSD2 and Instant Payments Regulation, as well as increasing adoption of open banking.

The overall Europe payments market is projected to grow at a Compound Annual Growth Rate (CAGR) of 15.23% from 2025 to 2030, increasing from USD 0.64 trillion in 2025 to USD 1.31 trillion by 2030[1]. Among payment modes, digital wallets and account-to-account rails (Pay by Bank) are expanding fastest with an 18.23% CAGR, outpacing cards and cash[1].

Instant Payments Regulation, effective January 2025, mandates euro transfers to settle in under 10 seconds at no extra cost, supporting real-time Pay by Bank transactions and reducing liquidity risk for businesses[1]. National schemes such as Poland’s BLIK and the Netherlands’ Ideal/Tikkie have achieved substantial market share, exemplifying the strength of Pay by Bank solutions in local markets[2].

Pan-European initiatives like the EPI digital wallet (collaboration of 16 major banks) and regional projects like Vipps in Nordic countries are evolving towards broader adoption of Pay by Bank methods[2]. Open banking APIs under PSD2 empower licensed third parties to access bank accounts for initiating payments, reinforcing the alternative to card schemes that Pay by Bank represents[2].

Token.io, a key player in the open banking and Pay by Bank ecosystem, is facilitating this growth. Mastercard's investment in Token.io highlights its strategic importance in enabling A2A payments[2]. Token.io provides API technology that enables payment initiation and account information services, supporting Pay by Bank payment flows.

By integrating deeply with banks and following PSD2 regulations, Token.io helps merchants and payment providers offer secure, instant payments bypassing traditional card networks, promoting lower transaction fees and enhanced user experience compared to card payments[2].

HSBC is broadening its adoption of Token.io's infrastructure for Pay by Bank, offering clients secure, fast, and convenient options for peer-to-peer payments, account deposits, and loan repayments. Manish Kohli, head of global payments solutions at HSBC, expresses trust and confidence in Token.io's team and technology.

Analysts predict that three in four Europeans will regularly use Pay by Bank by 2029, and that payment volumes will increase by 30% this year. Pay by Bank, underpinned by Open Banking and real-time payment infrastructure, reduces the cost and complexity of payments and simplifies the customer experience.

Nearly anyone with a bank account in the UK and Europe can currently use Pay by Bank through Token.io's solutions. Users pay directly from their bank accounts, quickly and securely authenticating transactions using their banking app with Pay by Bank.

The benefits of this collaboration are expected to be delivered to HSBC's customers across the region. European's use of Pay by Bank for e-commerce is expected to eclipse all other digital payment methods, second only to wallets, by 2030. The investment from HSBC marks an important milestone for Token.io.

References:

[1] Source: Juniper Research

[2] Source: Finextra Research

In a recent development, HSBC has partnered with Token.io since 2019 to power its HSBC Open Payments solution. Todd Clyde, the chief executive officer of Token.io, states that the investment will accelerate Token.io's growth and innovation. The investment from HSBC is expected to advance the shared vision of making Pay by Bank a mainstream payment method.

Token.io specializes in account-to-account (A2A) payment infrastructure. The video titled "In Focus - Pay by Bank: Unlocking new use cases with Token.io, featuring Ecommpay and The Money Platform" is available to watch. Token.io has secured additional funding from an overwhelming majority of its existing investors, reflecting their support for this significant industry development.

In conclusion, the growth of Pay by Bank in Europe is set to continue, driven by regulatory innovation, well-established national schemes, growing pan-European collaboration, and technology providers like Token.io enabling efficient A2A payments. The investment from HSBC is a significant step towards making Pay by Bank a mainstream payment method in Europe.

1. The collaboration between HSBC and Token.io, established in 2019, has been instrumental in powering HSBC's HSBC Open Payments solution, enhancing the bank's Pay by Bank offerings.
2. The recent investment from HSBC into Token.io underscores the strategic importance of Token.io's A2A payment infrastructure in driving the growth and innovation of the Pay by Bank ecosystem.
3. The European payments market, including the Pay by Bank sector, is projected to grow significantly, with digital wallets and account-to-account rails (Pay by Bank) demonstrating the fastest expansion rate at 18.23% Compound Annual Growth Rate (CAGR).
4. As more Europeans adopt Pay by Bank, analysts predict that a majority of Europeans will use Pay by Bank regularly by 2029, with payment volumes increasing by 30% this year.
5. The open banking landscape, underpinned by PSD2 regulations, empowers licensed third parties to access bank accounts for initiating payments, reinforcing the alternative to traditional card networks that Pay by Bank represents.
6. Singular pan-European initiatives like the EPI digital wallet and regional projects, such as Vipps in Nordic countries, are evolving towards broader adoption of Pay by Bank methods, underscoring the growing importance of collaboration in the fintech sector.

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