UK businesses call for change to costly payment models

The findings come from research commissioned by Open Banking provider Yapily, conducted by YouGov, which polled over 2,000 consumers and 250 businesses. 

According to the data, nearly four in five merchants consider transaction fees a major concern when assessing new payment options. Around two-thirds flagged fraud risks as a key issue, while more than half cited data breaches as a top worry. A significant portion of businesses also criticised the chargeback process, describing it as inefficient and biased towards consumers.

Merchants want lower costs, consumers want simpler checkout

The report highlights that cost and security continue to drive business preferences in payment acceptance. Nearly all merchants surveyed (98%) listed low transaction fees as a priority, followed closely by the need for secure systems. Around 40% indicated they are open to adopting Open Banking-based solutions, citing these as lower-cost alternatives with strong fraud protection. 

Consumers, on the other hand, identified convenience and safety as their primary concerns. For purchases under GBP 20 from familiar brands, almost half of consumers (49%) valued ease of use over security. However, for purchases over GBP 100, especially from unfamiliar merchants, security emerged as the dominant consideration for 51% of respondents. 

Despite the preference for fraud reduction (with 58% of consumers saying it would make them more likely to try a new payment method), traditional card payments remain the default option, even as open banking is associated with significantly lower fraud rates. 

The chargeback model also drew notable criticism from merchants. Two in five described it as overly favourable to consumers, nearly half wanted the process streamlined, and 41% supported removing it entirely.

Industry recommendations and call for unified action

In response to the survey results, Yapily has issued a set of recommendations aimed at supporting Open Banking adoption. These include establishing shared value propositions across the ecosystem, designing a consumer protection model for Open Banking, and introducing a recognisable trustmark to identify open banking payment options. 

Representatives from Yapily noted that while Open Banking is gaining traction, further growth depends on improving trust and usability. They stressed the importance of developing consumer protections that don’t replicate outdated mechanisms like chargebacks but still provide adequate safeguards for users.