Card networks still dominate UK retail, but QR + open banking is breaking through—faster, cheaper, and reshaping the high street.
Card networks still dominate the UK retail sector, but their quiet monopoly is starting to crack. QR payments, powered by open banking, are transitioning from a niche to an everyday reality on the high street. Early trials by small merchants are showing that this model could rewrite the economics of payments altogether.
Don’t get me wrong—bank cards have been the backbone of UK retail payments for more than half a century. They’re trusted, familiar, and, for most consumers, still the default way to pay.
But the story is starting to change. Growth has levelled off. In 2023, cards accounted for 86% of retail transaction value. By 2024, debit and credit cards still dominated, accounting for just over 85% of spending, but the trajectory is flattening as new payment types gain ground.
Contactless use hit a record high in 2024, with 94.6% of eligible in-store card transactions made this way. It’s a reminder that even within the card ecosystem, convenience is king.
It’s worth remembering that QR code payments are contactless too. Instead of tapping a mobile, customers scan a unique barcode with their phone, which directs them straight to a secure payment link pre-filled with all the necessary details. From there, they can pay by bank, and the money is transferred directly from their account to the merchant’s account.
Of course, QR codes can work just as efficiently with cards in a digital wallet; however, the difference lies primarily in the cost of third-party services. Card payments always mean higher costs (even in a digital wallet, as it’s still based on cards).
For example, with card transactions, you always pay the interchange fees – these are paid by the payment processor to the card issuer. They cover costs such as credit risk, fraud prevention, and processing card transactions.
| Card type | Transaction type | Interchange fee (for in-person transactions) |
| Debit | Domestic | 0.2% |
| Inter-regional | 0.2% | |
| Credit | Domestic | 0.3% |
| Inter-regional | 0.3% |
Source: Merchant Savvy, 2025
You also pay scheme fees, which are paid to card networks for using their payment infrastructure. The card networks set them and are non-negotiable.
| Card type | Scheme fee |
| Visa Credit | 0.0140% + £0.0145 |
| Mastercard Credit | 0.0398% + £0.0054 |
| Visa Debit (incl. prepaid) | 0.0100% + £0.0145 |
| Mastercard Debit (incl. prepaid) | 0.0398% + £0.0054 |
Source: Merchant Savvy, 2025
With open banking payments, known to consumers as pay-by-bank, these fees are removed altogether. Money moves directly from the customer’s account to the merchant’s, regulated by PSD2 and secure APIs. It also eliminates the headache of chargebacks, as the payment is authorised in the customer’s banking app.
Many still view open banking as a niche option—ideal for online checkouts, but largely irrelevant in-store. The reality is very different. As of March 2025, the UK has 13.3 million active open banking users, representing a 40% year-over-year increase. At this pace, a quarter of all UK current accounts could be open banking-active by mid-2026. These customers already understand how open banking works, and many would be eager to use it in-store.
Pair pay-by-bank with QR codes, and open banking breaks free from the screen. At the till, it’s faster and cleaner than cards: no numbers to insert, no awkward terminals for merchants to buy and use. It’s a win-win scenario.
With no hardware or high fees, open-banking QR payments are giving small businesses a better way. The question is, will card networks adapt or risk losing ground? Payment professionals should be thinking beyond cards now and exploring open banking-led models before their competitors get there first.
