Open banking reaches 11 million+ payments milestone

Open banking, the ground-breaking financial technology, has reached a significant milestone, surpassing 11.4 million payments in July 2023. This achievement reflects a 9.3% increase in total payments compared with the previous month, highlighting the growing adoption of open banking services. Year-to-date (YTD) data for 2023 against 2022 demonstrates that total payments have doubled, showing an exceptional 102.4% growth. This remarkable surge underscores the rapid pace at which open banking is reshaping the financial and payments landscape and reinforces the pivotal role it plays in driving financial inclusion, innovation, and consumer empowerment. In July 2023, the number of active payment users surged to 4.2 million, showcasing a substantial 10.5% rise from June 2023 and an impressive 68.2% surge from July 2022. This robust growth signals a clear preference among consumers using open banking solutions to manage their finances effectively. Among the key drivers of growth are single domestic payments, which recorded 10.5 million transactions in July, marking an 8% increase from June. This was propelled by several significant events, including government payments solutions and the onboarding of leading UK financial institutions and investment platforms. These institutions have introduced ‘pay by bank’ options, allowing users to conveniently fund a wide variety of savings and investment (S&I) products. Notably, these transactions align with the top three use cases for open banking transactions, ranked in order of volumes:

• Account top-ups: users embraced the option to top up their e-money transactional or current accounts, as well as savings and investment products. This demonstrates the convenience and efficiency that open banking brings to managing personal finances.
• Credit card bill payments: open banking streamlined the process of settling credit card bills, offering users a seamless way to make payments towards their credit card balances and simplify their financial management.
• E-commerce: open banking’s impact on online shopping, especially in e-commerce, is notable. Vendors, in particular, benefit from cost savings on card transaction fees. While currently more prevalent in e-commerce, this payment option lets vendors confirm receipt of funds before releasing goods, enhancing financial security and potentially transforming vendor strategies.
• Variable recurring payments (VRPs) also saw substantial growth, with 872,000 transactions in July, representing a notable 28.7% increase on the previous month.

All-time data shows that single domestic payments have now reached 163.2 million. For the year-to-date the growth is more pronounced. Single domestic payments have surged to 65 million, showcasing a significant increase of 95.6% compared with the same period last year. Sarah Cardell, Chief Executive of the Competition and Markets Authority, said: “It is fantastic to see how many consumers have benefited from Open Banking since the CMA’s retail banking market investigation Order was issued in 2017. Open Banking has transformed the way millions of people manage their money and today’s announcement is further evidence of the significant progress that has been made since 2017.” Marion King, Chair and Trustee of Open Banking Limited, said: “The strong and sustained growth in open banking payments underscores the rapid pace at which open banking is reshaping the financial and payments landscape. 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.”