UK sees surge in open banking payments with new monthly high
Open banking is continuing to prove successful in the UK after topping 11.4 million payments in July.
UK open banking tops 11.4 million payments in July
Six years after being instated by the Competition and Markets Authority’s (CMA) Retail Banking Market Investigation Order, open banking – an avant-garde technology enabling consumers and businesses to tap their transaction data to access more personalised financial services – is enjoying significant highs.
According to Open Banking Ltd, the entity formed in 2016 to oversee open banking’s implementation, the performance in July represents a 9.3% increase in the total amount of open banking payments recorded the month prior, with June recording 10.43 million payments accordingly.
In addition, total payments in open banking have demonstrated a 102.4% rise in year-to-date data, from the 5.63 million total payments recorded in July 2022.
The optimism extends to the number of active payment users too, which in July 2023 surged to 4.2 million, rising 10.5% from the approximately 3.8 million recorded in June 2023 and 68.2% from the 2.49 million users seen in July 2022.
In its latest statement, the Open Banking entity recognised single domestic payments among the catalysts of the technology’s continued success, which accounted for 10.5 million open banking transactions in July 2023 and reflected an 8% rise in the 9.7 million transactions recorded the month prior. All-time figures for single domestic payments currently sit at 163.2 million.
In addition to single domestic payments, there are currently a variety of initiatives at play that are guiding the UK’s rising adoption of open banking, and its proliferation within account top-ups, credit card bill payments and e-commerce, including initiatives led by the Joint Regulatory Oversight Committee (JROC) and the increasing adoption of open banking among financial institutions.
These institutions have supported the debut of a variety of open banking-based features, including variable recurring payments (VRPs) and pay-by-bank, including the UK paytech firm GoCardless, which first launched its open banking payments service in April 2021.
‘Reshaping the financial and payments landscape’
Reflecting on the latest results of open banking, the firm’s VP of product marketing and insights, Siamac Rezaiezadeh, describes the performance as a “fantastic milestone” and one that “clearly shows the appetite from both consumers and businesses to send and receive payments in this way”.
However, when comparing the figures against the “billions of payments” that are completed via direct debit and card systems each year, Rezaiezadeh admits that “it’s obvious that open banking payments have a lot of room to grow”.
To position open banking as a serious contender to more traditional payment methods, he recommends “the expansion of VRP into more commercial use cases” as a suitable starting point, from which “the numbers would really start to skyrocket”.
This statement appears to be confirmed by the present 28.7% monthly increase in VRPs, which completed approximately 872,000 transactions in July compared to the 677,000 transactions recorded in June.
Adding to the commentary on open banking’s latest results, Marion King, chair and trustee of Open Banking Ltd, says the growth of open banking payments “underscores the rapid pace at which open banking is reshaping the financial and payments landscape” and that it “reinforces the pivotal role open banking plays in driving financial inclusion, innovation and consumer empowerment”.
“As open banking continues to redefine the way people manage their finances, the doubling of total payments in just one a year is a remarkable achievement and testament to the transformative impact of open banking,” King adds.
