Open Banking in the UK – an update from American Express

Now that we have reached the half-year milestone, what are the main payment trends spotted by American Express in 2022 and which were their main drivers?

The pandemic was a catalyst for consumers to spend more money online and unlocked an appetite in many to try new payment methods. Our research found that 20% of consumers reported that the pandemic has changed the way they think about how they pay for goods and services. (Data is based on a YouGov survey of a nationally representative sample of 1,013 UK consumers who use online banking. The fieldwork was conducted in January 2021).

As we move into a post-pandemic world, the trend has continued with a growing demand for greater payment options combined with a more seamless experience. Many businesses as a result have evolved and diversified their payment offerings. In tandem, this increased appetite for alternative payment methods has seen the shift away from using cash continue. For example, the increased use of QR codes has also opened a whole new world of contactless possibilities for both businesses and consumers.

Secondly, there has also been a huge focus on data. Businesses are realising the value of tracking user behaviour on a website to optimise the user journey, in turn increasing conversion and revenue. Indeed, by looking at insights into how consumers use different payment options, businesses can refine and adjust their offering to make sure they're giving customers what they want.

In the context of Open Banking, what were the main opportunities and benefits for American Express?

Open Banking technology unlocks a wealth of new opportunities to create innovative payment solutions. Today’s shoppers no longer tolerate slow, problematic payment processes, with our research finding that 78% of consumers state they’ve experienced not being able to complete an online payment (YouGov survey).

This is one of the driving forces behind why American Express developed our Pay with Bank transfer (PwBt) product – to offer a speedy, secure way to pay for goods or services via a bank account transfer, regardless of whether the buyer is an American Express® Cardmember or not. Using Open Banking technology, Pay with Bank transfer also enables merchants to receive instant payments from all major UK banks’ current account holders, in turn helping them to manage their cash flow.

At American Express, our ambition is to offer consumers choice. As more financial services providers embrace Open Banking, and merchants and consumers adopt the technology, we’re excited to see a new wave of innovation that benefits all.

How do you feel about Open Banking’s progress in the UK and where do you see it going?

Open Banking has gone from strength to strength in the UK, and this growth looks set to continue. In the last month alone, 5 million Open Banking payments were made, and Open Banking payments have grown at a rate of 500 percent year-over-year – with more than six million active Open Banking users in the UK to date, according to OBIE data. With this in mind, there are huge opportunities for merchants to lead the way in their industry and upgrade their payment stack by adopting an Open Banking payments solution. 

But, whilst the progress is very encouraging, for Open Banking to become even more ubiquitous, merchants will need to continue to educate customers about Open Banking products – including what Open Banking is, where and how it is used, and how it benefits customers. There is always an adoption curve for new technology, like when contactless payment was first introduced or when Apple Pay first arrived. As Open Banking innovation continues at pace, it’s important to build consumer confidence so they’re comfortable using Open Banking products.

What new customer needs do you see emerging and how can Amex help with them?

We expect to see the growth of products powered by Open Banking develop over the next few years as adoption becomes more mainstream and the needs of consumers change. Digital invoicing, for example, is an area which can benefit from the rise of online solutions that help companies with efficiency and productivity – something that our customers increasingly look to improve. Digital invoicing solutions allow businesses to be more nimble by sending secure payment links via text, email or by taking payments via a QR code in-store. As well as this, it also facilitates efficient reconciliation as the digital invoices can embed unique identifiers to minimise errors reconciling invoices. Currently, only about 40% of businesses are currently using digital invoices but with digitalisation set to be the new normal, we expect the prevalence of digital invoicing to go from strength to strength moving forwards (SAP Whitepaper – The Essential Guide to Managing Invoices 2018).

We’re excited about the potential for our PwBt product and Open Banking more generally when it comes to transforming the payment landscape. We’re working collaboratively with merchants to make sure the product continues to meet their needs, as well as those of their customers, in terms of adding new features and functionality. Our ambition is to keep growing PwBt over the next few years and we’re evaluating the best approach to deliver that.

About Holly Conventry

Holly is responsible for continuing to grow the UK business and creating the future vision and roadmap for Open Banking Payments globally. Holly is an accomplished, well-respected leader who is strategic and commercially focused in her approach. She has an entrepreneurial and partner centric outlook and is highly adept at working in the emerging fintech Open Banking space. 

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