Data highlights

Open banking reaches 11 million+ payments milestone

30 August 2023

11.4 million payments mark year of significant growth

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 CMA, said: “It is fantastic to see how many consumers have benefited from open banking since the Competition and Markets Authority’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.”

Notes to editors:

1. Open Banking Ltd (OBL) was set up by the CMA9 in September 2016 as required under the Competition & Markets Authority’s (CMA) Retail Banking Market Investigation Order 2017 to fulfil one of the remedies mandated by the CMA following a market investigation into UK retail banking.

2. The CMA’s investigation into the retail banking market (whose findings were published in August 2016) concluded that older and larger banks do not compete hard enough for customers’ business and that open banking should deliver a new, secure option for customers to be able to compare the deal they are getting from their bank.

3. OBL’s role is to: 

• Enforce the obligations on the CMA9 under the CMA Order.

• Design the specifications for the Application Programme Interfaces (APIs) that banks and building societies use to securely provide open banking.

• Support regulated third party providers and banks and building societies to use OBL’s Open Banking Standards.

• Create security and messaging standards.

• Manage the OBL’s Open Banking Directory which allows regulated participants like banks, building societies and third-party providers to enrol in open banking.

• Produce guidelines for participants in the open banking ecosystem.

• Set out the process for managing disputes and complaints.

OBL spokespeople are available on request.

For enquiries, please contact: CiceroOpenBankingPR@cicero-group.com, 020 7297 5965