Open banking UK adoption is no longer a fringe financial technology story. It is becoming part of everyday payment behaviour for consumers and businesses.
The Financial Conduct Authority reported more than 16 million active open banking users by the end of 2025. It also reported 53% year on year growth in open banking payments. Open Banking Limited recorded 351 million payments during 2025, up 57% from the previous year.
Those numbers do not prove that every customer wants to pay directly from a bank account. However, they show something important. Bank based digital payments are becoming familiar enough for businesses to take seriously.
What open banking actually changes
Open banking allows a customer to authorise a payment through their own bank. The customer usually chooses a bank, signs in or uses a banking app, then approves the payment.
For a business, the appeal is not the technology itself. The value comes from what the payment journey can remove.
A customer does not need to type card details. A merchant does not need to display bank account details. Payment references can be attached to the transaction. In many cases, the payment moves through existing bank payment infrastructure.
Therefore, the experience can be very different from asking a customer to copy an account number, enter a sort code, remember a reference and send a screenshot.
Open banking growth matters because it turns direct bank payment into a more structured customer journey.
Adoption is moving beyond early experiments
Open Banking Limited reported that one in five UK consumers and small businesses actively used open banking by March 2025. That compared with one in 17 in March 2021.
By March 2025, customers made 31 million open banking payments in a single month. The FCA later reported more than 16 million active users and strong payment growth across 2025.
The direction is also visible in mainstream services.
HM Revenue and Customs lets people pay certain tax bills directly from their bank account. The customer chooses the bank payment option, moves into their own banking environment and approves the transaction.
Open Banking Limited also reported that Amazon and eBay introduced Pay by Bank options in the UK during 2026.
Again, this does not mean cards are disappearing. Instead, bank authorised checkout is becoming easier for customers to recognise.
Why open banking matters for small businesses
Small businesses often feel payment friction more sharply than larger companies.
A percentage fee matters more when margins are tight. A delayed settlement matters more when cash flow is stretched. Manual reconciliation matters more when the owner also handles sales, delivery and customer service.
Open banking services can address some of these pressures, depending on the provider and payment use case.
The strongest opportunities may sit where businesses already use bank transfer but dislike the experience around it.
A consultant may send invoices and chase references. A tradesperson may complete a job and then text bank details. A market trader may want a simple way to accept payment without another device. A service business may want customers to pay from a link sent by email or message.
In each case, the customer is already willing to move money. The problem often sits in the journey around that movement.
Open banking can make direct payment feel more like checkout.
Pay by Bank is not the same as ordinary bank transfer
This distinction matters.
Traditional bank transfer often places most of the work on the customer. The business sends account details. The customer opens a banking app. They add a payee. They type an amount. They enter a reference. Then the business may need to work out which payment belongs to which customer.
Pay by Bank can package more of that journey.
The amount and payment reference can be prepared in advance. The customer selects their bank and approves the payment. The merchant can receive clearer transaction information.
That difference may sound small. Operationally, it can matter.
The payment method may still use bank infrastructure, but the experience becomes more deliberate and easier to track.
What businesses should watch next
Open banking UK development is now moving into a new phase.
The FCA has highlighted account to account payments and variable recurring payments as important areas of development. Variable recurring payments allow customers to give controlled permission for repeated payments under agreed conditions.
That could matter for subscriptions, account sweeping and other recurring payment models.
However, businesses should still ask practical questions before adopting any new payment method.
- Does the customer understand the journey.
- Does the provider operate within the right regulatory structure.
- How quickly does the merchant receive confirmation.
- How are refunds handled.
- What happens when a payment fails.
- How does the payment connect with accounting and reconciliation.
- What does the service actually cost.
A new payment rail only creates value when the full experience works.
The bigger lesson for business payments
The most important lesson from open banking UK growth may be broader than open banking itself.
Payment behaviour keeps changing.
Cards remain dominant. Digital wallets are growing. Pay by Bank is becoming more visible. Stablecoin based payment infrastructure is also moving into the policy and business conversation.
Businesses should not need to rebuild their identity every time a new payment method becomes relevant.
Customers may change how they choose to pay. The business should still feel like the same business.
That principle sits behind the Paycilo proof of concept.
Paycilo is being developed around the idea of a consistent payment identity that can support changing payment choices over time. The project is still early, and the immediate work is research.
We are speaking with independent businesses about how they get paid today, where the friction sits and which payment journeys are genuinely worth improving.
Open banking growth gives the question urgency. It does not give us the answer.
The answer has to come from how real businesses and customers behave.
