American Express is leveraging open banking regulation to launch a new product that allows merchants to receive instant payments directly from UK bank customers.

The real-time payment option, intended to launch later this year, will be available to current account holders at UK banks, regardless of whether they are American Express members.

The ‘Pay with Bank transfer’ product means consumers can make online payments without a card to hand and view their account balances prior to confirming payment.

American Express is partnering with a number of UK eCommerce sites to launch the product including Hays Travel, JustGiving, Oak Furnitureland, Richer Sounds, Royal Lancaster London hotel and Thai Airways with more retailers to join the scheme in 2020.

Consumers will simply click on the ‘Pay with Bank transfer’ button on the merchant’s payment page and select the bank they wish to pay from. The consumer is then automatically redirected to the bank’s webpage or app to authenticate themselves and approve the payment details.

Imran Gulamhuseinwala OBE, trustee of the Open Banking Implementation Entity (OBIE) said: "It's great to see American Express seizing the potential that Open Banking can bring to companies, helping businesses offer a new method to swiftly and securely accept online payments from their customers.”

Dan Edelman, vice president, American Express, said: "Pay with Bank transfer reflects our commitment to delivering choice for UK consumers and businesses through new ways to pay. Today’s announcement is another way American Express is offering digital-first solutions in our effort to be an essential part of our customers’ digital lives.”

Keith Williams, general manager and head of UK and Ireland at JustGiving, said: “How consumers prefer to pay has never been under so much change, scrutiny and advancement and we are pleased to be partnering with American Express to be the first giving platform to innovate through Open Banking.

"This will not only put us at the forefront of consumer behaviour in payment and banking innovation, it will also make giving even easier.”

Open Banking is an initiative to enable people to better control their financial data. New EU rules have been put in place to allow people to pull together their data from multiple financial institutions, and share it with third parties who they trust to gain insights and value.