Pay by bank for small business: Cut card fees
Amounts last verified on September 21st 2026
Michel Myara is co-founder and product designer at looch, where he designs the ecosystem small businesses use to get paid and manage spend while keeping penny-perfect books.
With pay by bank, the customer approves the payment inside their own bank with no card in the middle, looch Pay charges 1% (min $1, max $10), and the money is final when it lands
On a $1,000 sale, looch Pay charges $10.00 by bank against $33.30 by an online card at 3.3% + 30¢. The bank payment arrives in seconds from banks that support instant payments or 4 business days from banks that don’t yet, and it’s final when it lands. Cards can be disputed after they land, with $35 per dispute and free countering. With pay by bank, the customer approves the payment inside their own bank and enters no card number.
Last verified: September 28th, 2026.
looch Pay, the payment product from looch, accepts instant pay by bank alongside cards, Apple Pay, and Google Pay, so a business can offer both from one checkout.
| Item | Pay by bank | Cards |
|---|---|---|
| What the customer does | Approves the payment inside their own bank, sees who is asking, the amount, and the reference, and enters no card number | Enters card details or pays with Apple Pay or Google Pay; returning customers get passkey checkout |
| Fee on looch Pay | 1% (min $1, max $10) | 3.3% + 30¢ online; 3% + 15¢ in person; foreign cards add 1.5% |
| Fee on a $1,000 sale | $10.00 | $33.30 online; $30.15 in person; $48.30 for a foreign card online |
| Who pays the fee | The business | The business, or passed to the contact, chosen per payment |
| When it arrives | In seconds from banks that support instant payments; 4 business days from banks that don’t yet | Settled card sales move to your looch account by a free daily standard transfer, or instantly at 1.5% (min 50¢) |
| When the money is final | Final on arrival: No disputes, chargebacks, or reserves | A card payment can be disputed after it lands |
| Disputes | None | $35 per dispute; countering is free |
| Best fit | Larger invoices, repeat clients, and thin margins | Small tickets below about $21, first-time customers, and quick in-person sales |
For a market benchmark, Square publishes an online API rate of 2.9% + 30¢.
Pay by bank for small business cuts the cost of larger invoices
Updated September 2026
pay by bank costs 1% and caps at $10. Online card payments cost 3.3%. At 1%, the cap keeps larger invoices from growing in cost. The 1% rate is the economic difference on larger invoices.
For a small business using looch Pay, pay by bank costs 1% (min $1, max $10). Online card payments cost 3.3% + 30¢, so once an invoice reaches $1,000, the pay by bank fee stops at $10 while the card fee keeps rising.
That cap changes the math on the work that matters most: Larger invoices, repeat clients, and sales where every point of margin counts. Cards still have a place. looch gives you both, so you can offer the payment method that fits the sale instead of treating card fees as unavoidable.
| Payment method | looch Pay fee | Best fit |
|---|---|---|
| Instant pay by bank | 1% (min $1, max $10) | Invoices where the capped fee matters |
| Card online | 3.3% + 30¢ | Familiar online checkout |
| Tap to pay | 3% + 15¢ | Quick in-person sales |
| Foreign cards | Add 1.5% | Card payments from abroad |
A card payment can be disputed, and looch charges $35 per dispute when one is raised. Countering a dispute is free. With instant pay by bank, money is final on arrival, so no dispute arises and no dispute fee applies.
On a $1,000 invoice, the difference is plain: $33.30 by card, $10.00 by bank. On a $10,000 invoice, it’s $330.30 by card, still $10.00 by bank. Below about $21, the $1 minimum makes a card the cheaper option.
Instant pay by bank puts the customer in control
pay by bank isn’t a card payment with a different checkout screen. With looch Pay, you send an instant pay by bank payment. Your customer sees who is asking, the amount, and the reference, then approves the payment from their own bank.
The sequence is simple:
- You send an instant pay by bank payment with the amount and reference.
- Your customer reviews and approves it from their bank or in looch.
- The money is pushed to your looch account.
You ask. Your customer approves. The money moves.
That’s the important distinction. An instant pay by bank payment starts with a message, not a pull. There’s no card number for the customer to enter and no card details for your business to store. The approval happens at the customer’s bank, where the customer can see exactly what they’re authorizing.
Final settlement is the benefit behind pay by bank
With instant pay by bank, an approved payment is pushed and settled, not pulled through a card network.
For your business, that means money that arrives done. There are no disputes, chargebacks, or reserves. The funds you receive are funds you can use.
The payment method doesn’t change the customer experience. They approve a clear request from their own bank. You get a payment method built for the invoices where card percentages become expensive. Some banks support instant payments and the money arrives in seconds. Payments from banks that don’t yet support them take 4 business days to arrive.
Sources: looch pricing.
The cap makes the savings easy to see
Every figure below uses looch’s published rates: Pay by bank at 1% with a $1 minimum and $10 maximum, and cards online at 3.3% + 30¢.
| Invoice | Card, online | Pay by bank | You keep |
|---|---|---|---|
| $50 | $1.95 | $1.00 | $0.95 more |
| $100 | $3.60 | $1.00 | $2.60 more |
| $500 | $16.80 | $5.00 | $11.80 more |
| $1,000 | $33.30 | $10.00 | $23.30 more |
| $2,500 | $82.80 | $10.00 | $72.80 more |
| $10,000 | $330.30 | $10.00 | $320.30 more |
The cap reaches $10 at $1,000. Every invoice above that amount costs the same $10 to collect by bank. A foreign card adds 1.5% to the card side, while the pay by bank fee remains capped.
That doesn’t mean looch wins every rate comparison. looch’s online card rate sits above the 2.9% + 30¢ that several competitors publish. Our survey of all-in-one financial platforms for small businesses explains where those products can be a better fit. For businesses collecting larger invoices, though, the pay by bank cap can outweigh the difference quickly.
Larger invoices are where pay by bank does its best work
A $5,000 invoice costs $10 to collect through pay by bank and $165.30 by online card. That isn’t a rounding error for a service business, contractor, consultant, or any operator billing substantial work.
The same logic applies when a client pays you repeatedly. Once a client understands the approval flow, pay by bank gives them a direct way to pay without entering card details again. Your cost stays lower on each payment, and the payment arrives final when it lands.
Thin margins make the choice even clearer. When you’ve already priced a job carefully, giving away a growing percentage of the invoice can erase the room you built into it. Pay by bank gives you a way to accept payments without cards when the economics call for it.
See the complete fee details on the looch pricing page.
Cards are still the better choice for some sales
A good payment setup doesn’t force every buyer through the same path. Cards remain useful, and sometimes they’re the better instrument.
- Small tickets: The $1 minimum means a card is cheaper below about $21. At a $10 sale, a card costs 63¢ against $1.00.
- First-time customers: Card checkout is familiar. For a customer who wants to pay quickly with the card already in hand, familiarity can matter more than a lower fee.
- Quick in-person sales: Tap to pay at 3% + 15¢ is built for a counter and a fast decision.
- Card rewards and preferences: Some customers want to use a specific card. Giving them that option can be worth the additional cost.
looch Pay lets you accept cards alongside instant pay by bank. For card payments, you can also decide per payment whether your business pays the card fee or passes it to the contact. That keeps the choice in your hands without turning away customers who prefer cards.
Square may be the better fit for a business selling mostly at a counter because its published in-person rate is 2.6% + 15¢, below looch’s 3% + 15¢. A business already running its online checkout through Square may also prefer to keep that setup. looch’s case is different: A capped instant pay by bank fee, the account where the money lands, and the books around it in one app.
looch connects getting paid to the rest of your business
Most payment tools stop at the transaction. looch is built for the operator who wants the payment, the account it lands in, and the books around it to work together.
If you already run your business in looch, use looch Pay to accept instant pay by bank when the invoice is large enough for the cap to matter. If you’re starting from scratch, start your business and open a looch profile with looch Start, then move from formation into accounts, payments, Smartcards, and real-time accounting in one app.
pay by bank won’t replace cards for every sale. It gives your small business a better option for the sales where card fees shouldn’t keep growing with the invoice.
Sources document the rates and product claims
- looch pricing: Instant pay by bank and card rates, arrival timing, transfer pricing, and dispute fees.
- looch Pay: Customer approval, accepted payment methods, passkey checkout, and final settlement.
- Square payment fees: Published online API and in-person card rates.
FAQ
What is pay by bank and how does it compare to card payments for a small business?
Pay by bank is a payment your customer approves inside their own bank and sends to you without entering a card number. On looch Pay, it costs 1% (min $1, max $10) against 3.3% + 30¢ for an online card payment. It’s final on arrival with no disputes, while a card payment can be disputed and carries a $35 dispute fee.
How much does pay by bank cost a small business?
On looch Pay, instant pay by bank costs 1% (min $1, max $10). That’s $10.00 on a $1,000 payment and still $10.00 on a $10,000 payment. The listed fee is charged to the business, and a card is cheaper below about $21 because pay by bank has a $1 minimum.
How long does a pay by bank payment take to arrive?
The money arrives in seconds from banks that support instant payments. Payments from banks that don’t yet support them take 4 business days to arrive. Instant payments can settle any day of the week, and the money is final when it lands.
Is pay by bank safe for a small business?
The customer approves the payment inside their own bank and enters no card number, so there aren’t any card details for the business to store. The money is final on arrival, with no disputes, chargebacks, or reserves. looch Pay checkout is protected by passkeys.
