Open banking business case unlocks £1M Pay by Bank funding
A global payments provider moved a stalled Pay by Bank idea into a funded program by treating open banking as a capital decision, backed by a CFO-ready business case.
Starting point
A global merchant acquirer and payments provider had been discussing open banking and Pay by Bank for couple years at this point. Lower cost of acceptance, strong SCA outcomes, and a different dispute profile were attractive.
Yet the initiative stayed unfunded. Leaders worried about cannibalizing card economics where IC++ and scheme fees underpinned the P&L. There was no single view of how Pay by Bank would affect net revenue once substitution, pricing, and adoption were included. The product team had conducted initial market research to validate that there is product need in UK, Brazil, and US, but lacked capital to build and launch the product. A robust business case was required for the CFO to allocate required funding.
Approach
The goal was to anchor the capital allocation decision in CFO priorities: unit economics, cannibalization math, investment guardrails, and KPI-based governance. The work was led by Bhuvan Maingi, Managing Partner at Strathen Group, in his earlier operator role as a growth strategy senior manager.
A combined top-down and bottom-up model made the tradeoffs explicit. Top-down, the team sized addressable GMV in priority segments across the UK, Brazil, and the United States. Bottom-up, it built scenarios for the share of eligible transactions that would shift to Pay by Bank at checkout. For each scenario, the model calculated shifted volume, merchant cost-of-acceptance deltas, and provider net revenue impact.
The model incorporated conversion and operational assumptions so “cannibalization risk” became a quantified set of levers. These included relative payment success versus cards, abandonment at bank handoff, platform and PISP fees, support and dispute workload, and the pricing moves required to make the offer compelling without eroding profitability.
The analysis was distilled into an investment pack designed for decision-making, not storytelling. Pay by Bank was positioned as a specific £1M UK-led MVP with defined outcomes, with Brazil and the United States on a sequenced roadmap that reused the same economics logic. Approval was tied to guardrails on adoption, payment success, cost-of-acceptance improvement, and net revenue performance, with staged release of incremental investment if thresholds were met. The team reviewed the pack with the CFO and finance leadership, addressing cannibalization and opportunity cost directly from the model.
The breakthrough was treating Pay by Bank as a P&L decision with explicit cannibalization math, not an innovation experiment.
Outcome
The division CFO approved £1M of capex for Pay by Bank, based on a business case that made adoption, unit economics, and cannibalization transparent and testable. With funding unlocked, the organization aligned on a tight UK MVP scope, including payment initiation, refunds, reconciliation and reporting, orchestration routing rules, and a clear support and disputes posture for an account-to-account product. Brazil and the United States were placed on a phased roadmap using the same economic logic.
A governance and measurement framework was established to support scale decisions. A small KPI set, including Pay by Bank selection rate, payment success, abandonment at bank handoff, cost-of-acceptance deltas, and net revenue versus the model, was reported to executive sponsors and the CFO. The approach became a repeatable pattern for evaluating open banking and A2A options, translating strategy into investable plans with explicit economics and measurable thresholds.
Open banking becomes fundable when economics, cannibalization, and KPIs are explicit so a CFO can approve with eyes open.
Today, this work shapes how Strathen evaluates Pay by Bank and A2A options: quantify cannibalization early, build a CFO-grade model, and tie funding to clear performance thresholds.
