Despite years of regulatory support, industry optimism, and substantial investment, Open Banking in the UK has yet to fulfil its original promise of transforming the payments landscape.
Open Banking struggles to gain ground
New data reveals just how far the initiative remains from mass adoption, especially when compared to traditional card payments.
Open Banking Transactions
In March 2025, Open Banking facilitated 27 million transactions in the UK, according to Open Banking Limited.
While that figure marks progress, it pales in comparison to the 1.92 billion card transactions recorded in February by the Payment Systems Regulator.
Such a disparity calls into question whether Open Banking can truly shift consumer behaviour at scale.
Initially introduced in 2018 as a regulatory initiative to spur competition and innovation in financial services, Open Banking enables consumers to share their financial data with third-party providers and initiate direct payments from their bank accounts.
Enthusiasm grew amid the UK’s fintech boom, with companies such as TrueLayer and GoCardless attracting high-profile investments and aiming to replace card-based checkout flows with “Pay by Bank” alternatives.
Adoption Stalled
Yet despite these ambitions, adoption has stalled.
Many consumers remain unaware of Open Banking’s availability, and those who are informed often perceive little benefit.
The seamlessness of established digital payment tools – such as Apple Pay and Google Pay – has set a high bar for user experience.
Moreover, traditional card schemes offer robust consumer protections like chargebacks, which Open Banking lacks.
“The problem is not that Open Banking doesn’t work,” said Riccardo Tordera-Ricchi, director of policy at the Payments Association. “It’s the fact that [other] payments work very well.”
For consumers accustomed to quick, secure and familiar payment methods, Open Banking appears to offer marginal improvements, at best.
Fintech Slowdown
Compounding the challenge is the broader fintech slowdown.
Higher interest rates have dulled investor appetite, leading to widespread layoffs and valuation cuts.
Once hailed as unicorns, several Open Banking pioneers are now fighting to reach profitability.
TrueLayer, for instance, has seen a dramatic fall from its $1 billion valuation, shedding a quarter of its workforce last year.
Yet industry advocates remain cautiously optimistic.
New Frontiers
New frontiers such as Variable Recurring Payments (VRPs) offer a potential breakthrough.
These would allow authorised third parties to collect flexible, recurring payments directly from users’ bank accounts – promising an upgrade over rigid direct debits.
However, efforts to commercialise VRPs have faced regulatory fragmentation and a lack of clear incentives for banks, who earn fees from traditional card rails.
Recent government intervention may provide a turning point.
In its national payments strategy, the UK pledged to simplify regulation and empower the Financial Conduct Authority to spearhead the rollout of VRPs.
Earlier this month, a consortium of 31 financial institutions agreed to jointly fund the next phase of VRP development, marking a tentative step forward.
Whether these moves will be sufficient to reposition the UK as a global leader in payment innovation remains to be seen.
While Open Banking has undoubtedly enabled progress in areas like lending and financial planning, its core proposition in payments still faces entrenched habits, superior alternatives, and institutional inertia.
For now, card payments remain king.
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