Not sure what open banking is? You’re probably already using it.

Open Banking has opened a world of possibilities for the payments landscape. By harnessing verified and consented information, open banking enables instant payments directly from a bank account with much less risk of error or fraud.


For the consumer: No input of sensitive data (such as card details) is required when making a payment, nor is any username or password. And the consumer authenticates the payment directly with their bank, providing a seamless and user-friendly payment experience.

For businesses: As well as being faster and safer, open banking also cuts costs significantly. Card payments are typically expensive, charging between 1.5% and 4% for every transaction. Open banking’s direct account-to-account payments bypass these fees, offering the market a much more cost-effective alternative.



So, when have you used open banking?


The answer is probably at least a few times, but without realising it. The seamless, hassle-free experience probably means you barely noticed much difference from how you’re used to paying for products or services. Apart from the fact that it was probably a swifter, more frictionless process – because that’s exactly what open banking is for consumers.

A growing number of businesses and public sector organisations now include open banking as a payment option, including energy providers, local authorities, and HMRC.


open banking – you're already using it



How do you know when you’re using open banking?


Although open banking is the overarching term for this payment journey, you’ll likely come across more conventional and familiar phrases when given the option to use it. These include:


  • Pay by Link
  • Bank Pay
  • Pay with Bank Transfer
  • Instant Bank Transfer


As you can see, they’re all similar descriptions; all with the common theme of sounding pretty fuss-free.

And don’t let the fact that this process may have passed you by as a reason to worry. There’s not a more secure payment method out there (whether you realise you’ve used it or not!)

With open banking, no credentials or account details are disclosed to the merchant, encrypted and secure APIs transfer the necessary information, and the whole process is overseen by the Financial Conduct Authority/a European National Competent Authority.

Put simply, for this all to work, companies must follow strict rules and stringent standards to keep your data secure.


Do you have questions or want more information on open banking?

We’re advocates of keeping the market as clear and accessible as possible. For any advice or support, get in touch with our friendly experts.

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| Images by vectorjuice on Freepik