UK Financial Conduct Authority And UK Payment Systems Regulator Set Out Next Steps For Open Banking

Open banking is a UK success story with over 11.7 million active users and over 22.1 million open banking payments made monthly. 

There was significant progress in developing open banking in 2024, thanks to voluntary funding from 20 leading firms. This included:

• fraud analysis capabilities
• consumer protections
• new open banking services such as variable recurring payments (which will give consumers greater sight and control over their regular payments)

It is clear from the National Payments VisionLink is external , and the government’s growth agenda, that continued success in this area is critical for the UK. The FCA and the Payment Systems Regulator (PSR) are fully supportive and are ready to meet this challenge – as set out in Nikhil Rathi’s letter to the Prime Minister and the PSR’s recent strategy updateLink is external.

Benefits of variable recurring payments 

An important initiative underpinning growth is the development of new services that will give consumers and businesses more choice in how they make and receive payments safely, securely and efficiently. 

As a step towards using open banking payments for e-commerce, variable recurring payments will help consumers to take greater control of their regular payments. It will do this by allowing customers to control how much can be paid at one time or over the course of a month, reducing the risk of unexpected expenditure. 

For businesses, variable recurring payments offer greater competition to current payment methods and could help reduce processing fees. They could also increase the proportion of customers who complete a payment, through better user experiences.

New independent operator for variable recurring payments

Open Banking Limited has been central to delivering progress. 

As part of the next steps to deliver variable recurring payments, Open Banking Limited will play a key role in establishing an independent central operator to coordinate how variable recurring payments are made. 

We support it in doing that, working with industry and trade associations, and look forward to significant progress being made in 2025. This will see live services available for consumers to make recurring payments to: 

• utility companies
• government
• financial services firms

In addition, we are working with industry and trade associations to progress development of the commercial arrangements underpinning both variable recurring payments and use of open banking for e-commerce.

Next steps

It is critical that the collaboration seen in 2024 across the industry continues this year. 

We thank industry for their continued support and engagement in the success of open banking so far and we will continue to work together constructively as we implement the next steps. 

The FCA and PSR will continue to work closely together, overseen by a joint steering committee.