Grocer expands pay-by-bank

Ahold Delhaize USA, the U.S. subsidiary of Dutch grocer Ahold Delhaize, is expanding its relationship with Fiserv to offer pay-by-bank throughout its omnichannel platform for three of its East Coast grocery brands: The Giant Company, Giant Food and Stop & Shop.

Pay-by-bank, also known as decoupled debit, bypasses the card networks and clears payments across the ACH rails. Typically, the retailer issues a proprietary card (think Target's RedCard) which is linked to the cardholder's checking account. Transactions typically take a day or two to show up on the cardholder's bank statement, as these transactions use traditional ACH clearing schedules, not same-day clearing.

Strong enrollment in U.S.

Since launching late last year, "tens of thousands" of customers of the company's U.S. stores have enrolled in the program, Ahold Delhaize said in a press release.

"Expanding digital payment choice is an example of how we continue to enhance our omnichannel platform, which in turn enables Ahold Delhaize USA brands to better serve their customers," said Keith Nicks, chief commercial and digital officer at Ahold Delhaize USA. "Pay- by-bank provides a simple way for customers to pay directly from their bank accounts, creating a seamless checkout experience and increased choice for the customer in terms of how they prefer to pay."

Lia Cao, chief revenue officer for enterprise and platform clients at Fiserv, said, "Adding pay-by-bank is more than introducing a new tender type. It reflects our commitment to strengthening the omnichannel platforms behind everyday commerce."

Joins ranks of Walmart, Amazon, others

Ahold Delhaize joins the ranks of several other large retailers that are turning to pay-by-bank as a way to hold down transaction costs. ACH fees are fixed, and can vary from 20 cents to $1.50, depending upon financial institution and transactions (retail versus wholesale).

Along with Target, Walmart, Sam's Club and Amazon all use pay-by-bank (decoupled debit). So do Circle K (Easy Pay), Cumberland Farms (SmartPay) and several gas chains. Gas Buddy, an app that helps people find the best prices on gas, also offers a decoupled debit card.

Decoupled debit has been around under one name or another for decades. Back in the 1980s the oil company then known as Mobile offered credit cardholders an ACH debit option for several years. But it never gained any real traction, and was discontinued when the company merged with Exxon in the late 1990s.

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