The Financial Conduct Authority (FCA) and the Payments Systems Regulator (PSR) have unveiled the next steps for UK Open Banking. At the heart of these planned steps is a new independent operator for variable recurring payments, a welcome announcement for stakeholders across the nation who were concerned about Visa’s account-to-account (A2A) scheme.
Open banking is a UK success story with over 11.7 million active users and over 22.1 million open banking payments made monthly.
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
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 and 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.” – according to the press release.
Commenting on the recent announcement, Francesco Simoneschi, Co-founder and CEO of TrueLayer, said: “The FCA’s support for the development of an independent central operator, to drive forward Open Banking is a significant and commendable step towards fostering competition and innovation in the UK payments landscape.
“By championing an open, transparent – and most importantly, independent – operator, the FCA is ensuring that consumers and merchants will benefit from lower costs, greater choice, and more secure payments. This is a crucial move that not only supports the future of Pay by Bank, but also strengthens the UK’s position as a leader in digital financial services.”
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
