16 March 2026
by Payments Intelligence
Almost a decade on from the Competition and Markets Authority (CMA) Order, open banking adoption continues to grow steadily, with API calls, connected accounts, and successful payments all moving upward without dramatic inflexion points. Progress is increasingly shaped by a shift from experimental infrastructure towards longer-term commercial and regulatory frameworks, alongside expansion into open finance.
Attention is now turning to the practical drivers of the next phase of growth, including commercial variable recurring payments, merchant adoption, and public sector use cases. At the same time, emerging developments such as agentic commerce and cross-border innovation are beginning to influence how open banking may be used in the years ahead.
Lower fees and faster settlement are attractive, but inconsistent protections and operational complexity still limit adoption.
Banks face higher infrastructure and compliance costs, with uncertain long-term commercial returns.
PSPs and fintechs see new product opportunities, but pricing uncertainty and fragmented standards remain barriers.
Regulators and industry groups shape adoption by setting rules on competition, protection, and sustainability.
Legislation has been fundamental to the growth of open banking and will likely spur further adoption. The Data Use and Access Act embeds open banking within a new “smart data” framework, giving regulators greater flexibility to improve commercial sustainability and expand data sharing beyond payment accounts into areas such as SME lending, pensions, and insurance. Encouraging participation from a wider range of financial institutions will further drive adoption.
Almost nine years after the CMA order, many expected faster adoption of open banking. It is increasingly likely that adoption will be driven by the supply side, either by merchants or by citizen-government financial interactions such as self-assessed tax payments.
An obvious comparison would be contactless payments. First launched in the UK in 2007, contactless payments now account for 66% of all credit card and 76% of all debit card transactions made in the UK.
However, the parallels are limited. Contactless payments largely replaced cash, with an initial limit of £10 per transaction, offering speed and convenience for small, regular purchases. Contactless payments were promoted by high-street banks and rolled out by major retailers such as Tesco, Boots, and Spar. Additionally, contactless benefits from a single, intuitive brand name and logo that open banking lacks, and is backed by significant above- and below-the-line marketing from schemes and issuers.
The question is whether adoption will be driven by merchants or by consumer demand. Whilst there are benefits for consumers, especially from data sharing, which can enable faster mortgage approvals and more favourable credit options, further adoption will likely be driven by the merchants who stand to gain more froåm lower fees and faster settlement.
Amazon’s rollout of Pay by Bank in the UK could mark an inflexion point. Customers of the UK’s biggest e-commerce platform will no longer need to enter or store card details, instead using open banking to connect to their bank account via TrueLayer. After placing an order, customers are redirected to their banking app to authorise the payment. Customers also receive an email from Amazon highlighting the benefits: cardless shopping, faster refunds, and no card expiration issues.
This isn’t to say consumer behaviour is irrelevant; trust and ease-of-use are essential.
Trust may be enhanced by association with other recognised brands, such as Avios (Qatar Airways now offers Avios points when customers use open banking).
Apple’s adoption of its Near Field Communication (NFC) technology could improve ease of use. Following pressure from European Union (EU) regulators, who raised antitrust concerns, Apple will allow third-party mobile wallet and payment service providers to access and interoperate with the NFC functionality on iOS devices through a set of APIs, free of charge, without requiring Apple Pay or Apple Wallet.
The policy change enables the emergence of new mobile wallet providers and more payment options, including the potential for open banking applications.
A variable recurring payment (VRP) allows customers to link an authorised payment provider to their bank account and have payments made on their behalf, in line with agreed limits. VRPs currently account for just over 15% of open banking transactions.
Commercial variable recurring payments (cVRPs) will enable a larger group of customers and businesses to access VRPs. Consumers will be able to make flexible, recurring payments to businesses such as utility providers. The UK Payments Initiative (UKPI) – a new company formed by 31 firms to enable VRPs – will operate a cVRP scheme.
In July 2025, Open Banking Limited (OBL) published a document summarising the two consultations it put out regarding cVRPs: one on the proposed Multilateral Agreement (MLA) and the other on the commercial model that will underpin the cVRP ecosystem.
The MLA establishes the framework for cVRPs, including rules, obligations, and technical requirements for participants and the Operator. Key features are:
The feedback supported the MLA’s objectives and design principles, though concerns were raised about the timing of technical changes, enforcement mechanisms, and consumer messaging requirements. Suggestions were made around additional use cases and purchase protections under e-commerce scenarios.
The initial proposed pricing range for wave 2 cVRPs was 3p to 11p per transaction, with a recommended range of 6p-8p. The latest proposal recommends a percentage of the transaction value (an ad valorem system) to make cVRPs competitive with other e-commerce payment types that use similar fee structures.
There was general support for the model’s alignment with PSR and FCA pricing principles. Concerns were raised about long payback periods, the transparency of cost calculations, and compliance with competition law. They argued for a fee at the higher end of the range.
The first cVRP was made in November 2025, powered by Tink in partnership with Visa, Kroo Bank, and Utilita. The FCA and Payment Systems Regulator (PSR) expect wide-scale adoption to “build confidence and unlock [cVRPs’] full benefits.” The regulators will evaluate industry-led cVRP adoption and growth at the end of 2026, using this to inform the long-term regulatory framework.
HM Treasury is expected to grant the FCA new powers to set open banking rules in 2026, and the FCA intends to consult on new rules for the Long-Term Regulatory Framework before the end of the year.
The Data (Use and Access) Act 2025 provides a long-term statutory foundation for open banking by embedding it within the UK’s new “smart data” framework. It affords HM Treasury and regulators the flexibility to redesign how payment account data is shared and commercialised. This shift is expected to address long-standing sustainability challenges in the open banking model (e.g. data holder bearing costs and a lack of a long-term funding model) while accelerating the transition to open finance. There is potential for expansion into areas such as SME lending, savings, insurance and pensions.
By enabling consent-based data sharing across a wider range of financial products, alongside new frameworks for digital identity and clearer rules on automated decision-making, the Act strengthens consumer trust and reduces friction in onboarding and service delivery. The Data (Use and Access) Act 2025 fosters a more competitive financial services market and enables innovation beyond payments.
The FCA has announced a partnership with Raidiam and a series of initiatives to accelerate the development of open finance, ahead of publishing a formal open finance roadmap and strategy by March 2026. Key initiatives include the Smart Data Accelerator, which allows firms to test real-world open finance use cases in a controlled environment, supported by the Raidiam partnership. The FCA is also running TechSprints on mortgages and SME finance (November 2025 to February 2026), indicating priority use cases for future open finance frameworks. The programme aligns with the government’s National Payments Vision and the UK’s ambition to lead globally in open banking and open finance.
Wave 1 cVRP payments covered low-risk use cases, such as payments to regulated financial services, regulated utilities sectors, and to local and central government; Wave 2 payments refer to e-commerce and target state use cases for cVRPs.
UK Finance, with support from Deloitte, is developing a proposed commercial model for Wave 2 open banking payments. The first phase of this development has been published and addresses commercially sustainable cost models, consumer protection, consistency between wave 1 and 2, and operational considerations related to fees. The commercial model must strike a balance between encouraging merchant adoption and offering a sustainable model for participants.
Open banking is well positioned to provide the payment mechanism for agentic commerce, where AI-agents can initiate and optimise transactions on behalf of consumers and businesses.
Open banking infrastructure provides a natural foundation for this evolution. Secure account access, standardised APIs, and consent frameworks enable agents to verify balances, compare providers, and initiate account-to-account payments without requiring card credentials. CVRPs are likely to be particularly important, enabling trusted agents to make repeat or conditional payments within predefined limits, such as managing subscriptions, reordering supplies, or optimising cash flow for SMEs.
Regulators and industry bodies will need to clarify how accountability is assigned when an autonomous agent executes a payment and how consent can remain informed and revocable in an automated environment. This is potentially compounded by 26% of merchants regarding consumer dispute processes as a barrier to open banking adoption, according to research by The Payments Association.
Open finance extends the data-sharing frameworks of open banking to savings, investments, pensions, insurance, and credit products. In the UK, the Data (Use and Access) Act provides the legislative foundation for future smart data schemes, but large-scale implementation is expected to be phased and gradual, with sector-specific rollouts likely over the next several years.
By sharing more of their financial data, consumers can benefit from better financial products and services, such as affordability assessments, improved access to credit, and faster mortgage reviews. For financial institutions, open finance creates opportunities to develop richer customer propositions, reduce onboarding friction, and make more informed lending decisions.
However, adoption faces structural and behavioural barriers. Data standardisation across diverse financial products remains complex, while concerns over liability, data quality, and commercial incentives persist. Consumer trust and consent fatigue also risk limiting uptake if the value proposition is not clearly communicated.
A pilot by Swift and UK Faster Payments (the system that processes open banking payments) in 2020 showed that cross-border payments could be cleared and settled in seconds, highlighting the potential for open banking use cases in cross-border payments.
There are similar cases internationally. The expansion of instant payment schemes and their cross-border linkage — including the consolidation of SEPA credit transfer and SEPA Instant, and the extension of connectivity to partners such as Canada, alongside UPI’s growing international corridors — creates new opportunities for open banking-enabled payment initiation services to operate across jurisdictions.
In this context, open banking can serve as a unifying access layer, enabling regulated third parties to initiate cross-border account-to-account payments via standardised APIs rather than bespoke correspondent banking integrations. This supports faster settlement, improved transparency, and greater competition in international payments for consumers and SMEs.
Stablecoins introduce a parallel model of cross-border value transfer that sits outside traditional scheme interoperability. While they offer speed and programmability, their adoption remains constrained by regulatory divergence, safeguarding requirements, and integration challenges with existing bank accounts.
Rather than rendering open banking and scheme interoperability redundant, stablecoins are more likely to coexist as a complementary rail for specific use cases or on the backend of A2A payments.
Open banking’s progress has been incremental rather than transformative, but its direction of travel is clear. Legislative reform, particularly through the smart data framework, is redefining the commercial and regulatory conditions under which it operates, while cVRPs signal a move from single payments towards programmable, recurring account-to-account use cases. Adoption is increasingly shaped by supply-side incentives, with merchants and service providers driving real-world deployment ahead of mass consumer pull.
Looking ahead, the strategic relevance of open banking extends beyond domestic payments. Its role as an access layer for agentic commerce, open finance, and interoperable instant payment systems positions it as connective infrastructure with much broader use cases than its current application. Stablecoins and alternative rails may coexist alongside it, but regulated, API-driven account-to-account payments are likely to remain central to mainstream financial activity. The next phase of growth will depend less on technical capability and more on trust, usability, and sustainable commercial models.
UK merchants expect agentic commerce to grow rapidly, but uncertainty around liability, fraud, and standards is slowing readiness.
Stablecoins are moving into mainstream finance, reshaping payments, trade, and regulation as institutions explore faster, programmable settlement.
A forward-looking overview of key regulatory developments across payments, crypto and financial services, with timelines and practical implications.
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