The status of Open Banking payments in the UK, use cases, merchants' benefits, and more

Monday 30 January 2023 07:54 CET | Editor: Raluca Ochiana | Interview

Holly Conventry, VP of Open Banking Payments for International at American Express, runs us through the status of Open Banking payments in the UK, use cases, merchants benefits, and more.



What can you tell us about the Open Banking payments growth in 2022?

Twelve months ago, we predicted that 2022 would be the year that Open Banking went ‘mainstream’, and this is definitely proving to be the case. It’s been a game-changing period.

Recent data from the Open Banking Implementation Entity highlights this rapid speed of growth. In the six months to March 2022, there were 21.1 million Open Banking enabled payments – more than three times that in the same period in 2021. A significant proportion of people are now using Open Banking-enabled technology to make payments, especially here in the UK. And this growth is accelerating, with more than 6 million individuals and businesses in the UK regularly using Open Banking services.

The reasons for this are manifold – at its core, Open Banking enables people to gain greater control over their spending and initiate transactions seamlessly and securely.

Open Banking-enabled payments products can also offer consumers stronger transparency around their finances, which people want to protect now more than ever; Open Banking technology gives consumers more visibility and reassurance about how their financial data is used and who can access it while making the payment process itself more secure.

How do merchants look at A2A payments now, compared to last year?

It’s undeniable that the pandemic encouraged more people to shop online, often for products or services that they may have previously visited a store to purchase. While there will always be a place for the face-to-face experience in retail, ecommerce continues to grow in importance, with nearly 40% of all retail sales in the UK being ecommerce.

Our research found shoppers have become more open to trying new forms of payments online. As shoppers’ confidence with newer types of payment options grows, Open Banking-enabled payments can offer all merchants – both on and offline – new ways to stand out from the competition. Many have looked again at their offering here and sought to provide customers with a wider range to improve their customer experience.

As a result, A2A payment options – including American Express’ own Pay with Bank transfer product – are rising in popularity. Pay with Bank transfer is a product that enables merchants of all sizes to offer their customers an alternative way to pay for goods and services online and in-store – and customers don’t need to be an American Express® Cardmember  to use this secure, mobile-first solution.

By opting to pay via a bank transfer, shoppers can see their balance, giving them the visibility they need to make informed decisions on the purchases that matter – and transactions can be made in one easy click, or via a QR code without entering lengthy debit card details. Merchants can also receive payments instantly, which in turn helps them stay on top of their cashflow – an important factor, in light of the rising costs faced by many.

What are the use cases you see Open Banking payments applied to? Which verticals prove to be most receptive?

Open Banking payments have many benefits depending on the pain points you are trying to solve. We have heard from several merchants that payment reconciliation can be cumbersome and time-consuming – Pay with Bank Transfer helps to alleviate both of these things. The perception that only online retailers can benefit from Open Banking technology is rightly being debunked – our digital invoicing solution is being used to streamline in-store payments by several merchants.

As we’ll inevitably see customers and buyers in all sectors become increasingly conscious of their spending, protecting brand loyalty is crucial for all merchants, regardless of sector.

Organisations that are fundraising, for example, can see the impact directly on their fundraising activity. Because Open Banking technology facilitates payments directly from the customer’s bank account, direct to the merchant – avoiding the higher costs that come with processing card payments – the cost of fundraising is significantly reduced.

What does the future of Open Banking payments look like? What are your predictions? 

Businesses are turning to Open Banking payments to increase conversions, drive down costs, and build stronger relationships with digital-savvy consumers. We’ll undoubtedly see more innovation and new kinds of products, and watch Open Banking go from strength to strength in the months and years ahead.

To support this further, more education and conversation are needed. What stands out is that 64% of consumers have used an Open Banking product this year without even realising it.

As change is often met with resistance, it’s crucial we continue to educate businesses and consumers about what Open Banking options are out there, where, and how it is used, and what it means for them to help instil confidence, build trust, and encourage customer loyalty.

This interview has first been published in the Open Banking and Open Finance Report 2022. Click here to download the report.

About Holly Coventry

Holly is responsible for identifying new sectors to grow Open Banking adoption. Holly is an accomplished, well-respected leader in the Open Banking Space, who is strategic and commercially focused in her approach.




About American Express

American Express is a globally integrated payments company, providing customers with access to products, insights, and experiences that enrich lives and build business success. Pay with Bank transfer powered by American Express is a new way for consumers to pay online or in-store directly from their bank account. It’s powered by American Express, but open to everyone. Find out more here.

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Keywords: Open Banking, Open Finance, merchants, ecommerce, digital payments
Categories: Banking & Fintech
Companies: American Express
Countries: World
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