Bank of America today launched Pay by Bank, a real-time payment option that allows customers of e-commerce companies in the U.K. to pay directly from their bank accounts. The $3.1 trillion bank launched the solution with fintech Banked Ltd., which provides an account-to-account payment software platform.

Also today, London-based Banked raised $20 million in a series A funding round led by Charlotte, N.C.-based Bank of America and Edenred Capital Partners, according to an announcement from Bank of America, bringing the total amount raised to more than $30 million. Participation from U.S.-based investors supports the company’s plans for U.S. expansion, the bank noted in announcing the fundraise.

Pay by Bank works by allowing customers to select a payment option at checkout, and then their personal bank from a menu. To authenticate the payment, customers validate their login credentials through their online banking platform connected via application programming interface (API) that leverages open banking/PSD2, which is a European regulation for electronic payment services.

When that is authenticated, the payment is sent directly from the customer’s bank to the company’s account. Much like with PayPal, the customer then returns to the checkout page and the transaction is completed — but unlike PayPal, no financial details are shared with Banked.

Customers do not have to be a Bank of America client to use Bank to Pay, the bank told Bank Automation News; however, it is available to Bank of America’s corporate clients.

Bank of America would not specify fees associated with the offering saying only “The Pay by Bank solution is cost effective and avoids card-processing fees.”

Pay by Bank enhances security because e-commerce companies do not need to obtain or store credit card data, rather, it leverages the customer’s bank authentication network, Bank of America said in the announcement. It also streamlines reconciliation for companies, with incoming payments added to the company’s receivables so they can view everything in one place. Companies can connect the solution to their existing treasury system using an API.

While Pay by Bank is currently only available in the U.K., there are plans to roll out to other countries and regions soon, the bank said. It did not provide a timeline for when it might reach the U.S., saying it would launch “on a strategic basis as the solution and the industry evolves,” specifically an open banking standard such as PSD2.

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