Where next for Open Banking in the US

Sumner Francisco, Head of Pay by Bank at BNY, outlines where US Open Banking is headed and how API-driven payments and market innovation are reshaping money movement.

Consumers increasingly expect fast, intuitive service that mirrors the real-time interactions of everyday life. To meet this demand, the US payments landscape is undergoing a broad digital transformation – moving away from legacy, paper-based processes such as checks toward modern, API-driven solutions.

One key enabler of this shift is Open Banking: a framework that allows consumers to securely share financial data with authorised third parties. The breakthrough is reshaping how consumers and businesses access and exchange financial information – and, in turn, how money moves.

By connecting directly to users’ financial data – with their consent – institutions can streamline onboarding, account linking, and payment initiation. The model offers consumers greater control and convenience, while helping businesses deliver faster, more secure, and more cost-effective payment experiences.

As Open Banking adoption grows, the focus is increasingly on the frameworks that will sustain it – and whether these will be shaped by regulators or driven by the market itself.

A shifting regulatory landscape

Although Open Banking’s roots in the US are market-driven, regulation has begun to play a more impactful role. In November 2024, the Consumer Financial Protection Bureau (CFPB) issued its Personal Financial Data Rights Rule, implementing Section 1033 of the Dodd-Frank Act to give consumers greater control over their financial information.

Since then, however, questions have grown over how – and even whether – the rule will proceed in its current form. The CFPB has reopened consultation through an Advanced Notice of Proposed Rulemaking (ANPR), signalling a potential recalibration of its approach to consumer-authorised data sharing. The review will consider who can access consumer financial data, how costs and responsibilities are allocated, and how privacy and security can be best protected.[i]

It now appears that if the rule does move forward, its scope will be narrower than initially envisioned. While this introduces more uncertainty to the regulatory trajectory of Open Banking in the US, the overall impact is likely to be limited. The foundations of Open Banking have been forming through market-led initiatives for several years, as the industry continues to advance shared goals of secure data sharing, greater transparency, and improved user experience – supported by a growing number of tangible use cases.

Three use cases defining Open Banking

The flexibility of Open Banking solutions means its applications span a wide range of industries and payment types. Three categories, however, stand out for their current and potential impact:

1. One-time payments. Open Banking-enabled ‘Pay by Bank’ transactions allow consumers to make one-off payments directly from their bank accounts – a cost-effective alternative to traditional card payments. By leveraging existing ACH rails – and with the added security of multi-factor authentication – merchants can reduce interchange costs and settlement risks while offering customers a seamless checkout experience. The benefits extend beyond ecommerce: at point-of-sale, for instance, a shopper can complete their grocery purchase by convenient options like Near Field Communication (NFC), or by scanning a QR code – enabling secure, frictionless account-to-account settlement.
2. Recurring payments. Open Banking can also improve recurring transactions for billers and subscription services. Instead of entering routing and account details manually, enrolling customers can link their payment accounts in seconds by logging into their existing online banking portal – a familiar, secure step often supported by Multi Factor Authentication – to authorise data sharing. The biller then retrieves the necessary payment details directly, eliminating manual entry and creating a seamless, low-touch onboarding experience aligned with modern digital expectations.
3. Account funding for investments. In the brokerage and wealth-management sectors, Open Banking connectivity simplifies account-funding processes. Similar to the use case for recurring payments, Open Banking allows customers to seamlessly link external bank accounts without manual data entry, accelerating the onboarding process and allowing users to put their cash to work faster.

The way forward

The direction of travel is clear: Open Banking in the US is advancing, propelled by customer demand and a compelling set of use cases – where it is well placed to meet growing expectations for intuitive, secure, and immediate digital services. Though upcoming regulatory changes may accelerate adoption and standardisation, it is unlikely to overtake market action as the primary catalyst. 

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[i] https://natlawreview.com/article/cfpb-reopens-its-open-banking-rule-comment

This editorial piece was first published in The Paypers' Open Finance Report 2025, the latest comprehensive market overview and analysis focusing on the key players and products within the Open Banking and Open Finance ecosystem. Download the full report to discover more insightful content.

About the author

Sumner Francisco is Head of Pay by Bank at BNY, where he leads BNY’s BankifySM solution to deliver cost-effective and seamless payment services. Designed to modernise bank payments like ACH and RTP, BankifySM makes it easier than ever for customers to pay directly from their bank accounts. It offers guaranteed ACH that helps address settlement and fraud risk, while consumer-permissioned data thru open banking streamlines customer enrolment and account creation.

About BNY

BNY is a global financial services company that helps make money work for the world – managing it, moving it, and keeping it safe. For more than 240 years BNY has partnered alongside clients, putting its expertise and platforms to work to help them achieve their ambitions. Today BNY helps over 90% of Fortune 100 companies and nearly all the top 100 banks globally access the money they need. BNY supports governments in funding local projects and works with over 90% of the top 100 pension plans to safeguard investments for millions of individuals, and so much more. As of September 30, 2025, BNY oversees USD 57.8 trillion in assets under custody and/or administration and USD 2.1 trillion in assets under management.