Every card payment a business takes pays a quiet toll on its way to the bank, and merchants have grumbled about it for decades without an alternative worth the name. That changed faster than most tills did: Britain’s open banking system passed one billion payments in 2026, and paying straight from a bank account is now something millions of customers do without thinking. Here is what a merchant actually needs to know, with the real numbers.

Live since	January 2018, ordered by the CMA alongside PSD2
Scale	One billion cumulative UK payments passed in 2026
Active users	16.5 million connections in December 2025, up 36% in a year
2025 volume	351 million payments, up 57% year on year
June 2026	Over 40 million payments; a record 2.81 billion API calls
Growth area	Variable recurring payments, roughly 16% of transactions

The Milestone Nobody Noticed At The Till

Somewhere in Britain in the summer of 2026, a customer paid for something by tapping a button that said pay by bank, and the country’s open banking system quietly passed one billion payments. There was no ribbon to cut. That is rather the point: the most successful payment technologies are the ones people stop noticing, and open banking has spent eight years becoming invisible. For a merchant deciding how to take money, that billion is the strongest evidence available that this has stopped being an experiment.

What Open Banking Actually Is

Strip the jargon and open banking is one idea: your bank must let you share your own account access with regulated third parties, safely, because it is your money and your data. In practice that means a customer can pay a business directly from their bank account, approved with their face or fingerprint in their own banking app, with no card in between. It exists in Britain because regulators ordered the nine largest banks to build it after a competition inquiry, with the first connections going live in January 2018.

The Numbers A Merchant Should Actually Know

Here is the adoption curve in three verified figures. In December 2025 there were 16.5 million active open banking user connections in the UK, up 36 per cent in a year. Payments through the system reached 351 million in 2025, up 57 per cent year on year. And in June 2026 alone the ecosystem handled over 40 million payments and a record 2.81 billion API calls. Whatever a sales deck tells you, those are the industry’s own published figures, and the direction is unmistakable.

Why Card Fees Built This Market

Every card payment a merchant takes carries a toll: interchange, scheme fees and acquirer margin, typically adding up to a meaningful slice of each sale, and more for smaller businesses without negotiating power. Open banking payments move money account to account, bypassing the card rails entirely, which is why they generally cost a fraction of a card transaction. On thin retail margins, shaving even one percentage point off the cost of taking money is the difference between a hard year and a decent one.

Settlement Speed Changes Cash Flow

Card settlements arrive in a merchant’s account days later. An open banking payment travels over the Faster Payments rails, which means the money typically lands in seconds or minutes, on weekends and bank holidays included. For a business managing stock, wages and rent out of a single current account, that is not a convenience feature. It is working capital appearing days earlier, every single day, without borrowing a penny.

No Card Numbers Means Less To Steal

Card fraud works because card numbers are reusable secrets that pass through many hands. An open banking payment has no card number at all: the customer authenticates inside their own banking app, the payment is approved with strong customer authentication, and there is nothing reusable left behind to skim or leak. Chargeback fraud largely disappears with it, because bank transfers are pushed by the customer rather than pulled by the merchant. Fraud does not vanish, but the attack surface shrinks dramatically.

What A Platform Adds On Top Of The Rails

The rails are regulated infrastructure; a platform is what makes them usable. A good one handles the connections to hundreds of banks, presents the customer with a clean checkout, retries failed authorisations sensibly, reconciles what arrived against what was ordered, and gives a finance team a dashboard rather than a log file. Providers of open banking platforms compete on exactly these layers: bank coverage, conversion rate at checkout, and how much reconciliation work they remove from the merchant’s week.

The Questions To Ask Any Provider

Choosing a platform comes down to a short list of blunt questions. Which banks and countries are covered, and how completely? What happens when a bank’s interface goes down at nine on a Friday night? What is the real all-in cost per transaction at your volumes? How does refunding work, since bank transfers have no built-in refund button? And is the provider properly authorised by the regulator in the markets where you trade? A provider who answers all five plainly is worth shortlisting.

Variable Recurring Payments Are The Next Wave

The newest development matters for anyone billing customers repeatedly. Variable recurring payments let a customer authorise a business to take payments of varying amounts within agreed limits, a smarter successor to the direct debit. Sweeping VRPs nearly doubled in volume year on year, and now account for roughly 16 per cent of open banking transactions, with commercial VRP pilots launching across utilities, regulated finance, government and rail in early 2026. Subscription businesses should be watching this closely.

Where Open Banking Fits Beside Cards

Honesty helps here: open banking will not replace cards at every till tomorrow. Cards carry habits, rewards points and a refund process customers understand. Where pay-by-bank wins first is high-value payments where card fees sting, bill payments, account top-ups, invoices and any checkout where the customer is already on their phone. Sensible merchants add it as an option beside cards and watch which customers migrate, rather than betting the shop on a single rail.

The Customer Side Of The Bargain

None of this works unless paying by bank feels easier than typing a card number, and that battle is being won by the phone itself. A pay-by-bank checkout hands the customer to their own banking app, where approval is a glance at a face scan. No sixteen digits, no expiry date, no wondering whether the site should be trusted with the card. Younger customers in particular increasingly treat typing card details as the odd, old-fashioned step.

What It Costs To Do Nothing

A merchant who ignores this shift is not standing still; they are paying the old toll while competitors stop paying it. The published growth rates, 57 per cent more payments year on year and a billion cumulative, mean customer expectations are moving whether any individual business moves or not. The practical risk is not missing a trend. It is being the checkout that still feels like 2019 when the shop next door takes payment in one thumbprint.

The Fine Print A Merchant Should Respect

Two honest cautions belong in any guide like this. First, bank transfers are effectively final, which is excellent for fraud and demands a clear, well-run refund process on the merchant’s side. Second, the customer experience depends partly on each bank’s own app, which the platform cannot fully control; conversion rates genuinely differ between providers because of how they handle the weaker banks. Ask for conversion data by bank before signing anything, and treat anyone who will not share it accordingly.

How Britain Ended Up Leading This

It is worth knowing why the UK is the reference market. The Competition and Markets Authority concluded that the big banks held customers’ data captive and ordered the nine largest to open it up, alongside Europe’s PSD2 rules. The result, live since January 2018, became the model countries from Brazil to Australia studied. For merchants trading internationally, that matters practically: the platforms built here tend to travel well, because they grew up under the strictest homework.

Where The Money Conversation Goes Next

Payments sit inside a bigger financial picture for any business: rates, energy bills and consumer confidence all land on the same spreadsheet. Our report on the Bank of England holding rates at 3.75% covers the backdrop merchants are budgeting against, and our guide to paying safely abroad looks at the same payment revolution from the customer’s side of the counter. The direction across all of it is identical: money is moving to rails that are faster, cheaper and harder to steal from.

Final Thoughts

A billion payments, 16.5 million active users and growth above fifty per cent a year is not a trend to monitor; it is a shift already underway at the checkout. Add pay-by-bank beside cards, ask providers the blunt questions above, and let your own customers show you how fast to lean in. Our other money guides cover the rest of the picture.

This article is general information for businesses about payment technology and is not financial, legal or regulatory advice. Figures are drawn from published industry data and may change. Verify any provider’s authorisation with the relevant regulator before contracting.

Frequently Asked Questions

What is an open banking platform?

A service that connects a business to bank payment rails: it handles bank connections, checkout, retries and reconciliation so customers can pay directly from their bank account.

How many people use open banking in the UK?

There were 16.5 million active user connections in December 2025, up 36% in a year, and the system passed one billion cumulative payments in 2026.

Are open banking payments cheaper than cards?

Generally yes. They bypass card interchange and scheme fees entirely, which is why per-transaction costs are typically a fraction of card costs.

How fast do open banking payments settle?

They travel over Faster Payments, so money typically arrives in seconds or minutes, including weekends and bank holidays.

What are variable recurring payments?

Authorised recurring payments of varying amounts within agreed limits, a successor to direct debit. They already make up roughly 16% of open banking transactions.

Is open banking safe for customers?

Payments are approved inside the customer’s own banking app with strong authentication, and no reusable card number exists to be skimmed or leaked.