In this episode of the Payments Power 50 podcast, host David Parker and guests discuss the evolution and current state of open banking.
Open banking in the UK has reached a point where it can be assessed on delivery rather than promise. There are now more than 16 million users, and open banking payments are up 53 per cent year on year, putting account-to-account payments firmly on the map as a mainstream option rather than a niche alternative.
At the same time, attention is shifting to how well the model works in practice: for merchants deciding whether to prioritise Pay by Bank, for payment companies building sustainable propositions, and for consumers exploring new ways to pay and manage recurring outgoings.
Variable Recurring Payments (VRPs) are an increasingly important part of that picture, offering consumers more control over permissions and limits than traditional recurring payment methods, and opening up new use cases for businesses.
The Power 50 podcast
Our panellists, including David Parker, founder and CEO of Polymath Consulting, George Parks Davie, VP of product at Brite Payments, Timo Seifert, director of product management at Unzer and Miroslav Pekárek, CPO at Aevi, explore the challenges and opportunities presented by open banking payments, including consumer trust, confirmation of payments, and the impact of regulations like PSD3.
The conversation also delves into the future of VRPs and the operational challenges faced by payment providers. Insights from industry experts highlight the importance of consumer protection and the need for standardised practices to enhance the open banking experience.
Key takeaways
- Open banking has reached a tipping point with increased user adoption.
- Consumer trust in merchants is essential for the success of open banking payments.
- The enrollment process for open banking payments remains a significant challenge.
- Chargebacks and consumer protection are big gaps in open banking.
- Biometric authentication could enhance security and user experience.
- Variable recurring payments present new opportunities for merchants and consumers.
- Standardisation and consistency in payment practices are needed for growth.
- The future of payments is leaning towards account-to-account transactions.
- Operational challenges, such as API stability, hinder the growth of open banking.
