- within Corporate/Commercial Law and Privacy topic(s)
Recent data from the United Kingdom—widely regarded as the most advanced market for open banking—together with FCA reports published this week, point to a quiet yet structural transformation in the payments landscape.
The figures are strong: 16 million active open banking users and 53% year-on-year growth in payments. However, the real issue is not the growth rate itself, but the change in payment behaviour.
The latest roadmap published by the FCA and the Payment Systems Regulator (PSR) clearly shows that the focus of open banking is shifting from data sharing to "seamless account-to-account payments" (A2A).
"Account-to-Account (A2A) payments are a payment method whereby funds are transferred instantly and directly from the consumer's bank account to the recipient's (merchant's) bank account, eliminating card schemes (such as Visa/Mastercard) and other intermediaries."
In light of developments in the UK, three strategic themes are emerging that are likely to shape the open banking agenda in the period ahead:
- An Alternative to Card Schemes: Commercial VRP (cVRP)
To date, open banking payments have largely been limited to transfers between an individual's own accounts. The new approach, however, shifts the focus to Commercial Variable Recurring Payments (cVRP).
What does this mean?
Subscriptions (such as Netflix, Spotify, etc.) and bill payments can be managed directly from bank accounts without relying on card infrastructure.
For merchants, this model means:
- Lower transaction costs
- Faster cash flow
- Reduced dependence on card fees
In short, it represents a change that directly affects the cost structure of the payments economy.
- The Initial Focus Is Not E-Commerce, but "Essential Payments"
The expectation was that open banking would first become widespread in e-commerce checkout flows.
The UK, however, is pursuing a more cautious and strategic path.
Priority areas under "Phase 1" include:
- Utilities (electricity, water, etc.)
- Government payments (taxes)
- Financial obligations (loan repayments)
The strategic rationale is clear: the system will first prove itself in areas that require a high level of trust, carry lower fraud risk, and directly contribute to consumers' financial order—such as rent or bill payments aligned with salary dates.
In our jurisdiction, it can also be said that open banking has not yet become widespread even in e-commerce checkouts. Despite the technical and regulatory feasibility of "Pay from Account," a payment initiation product and a successful A2A example, its adoption remains limited. One possible reason is undoubtedly the strong preference of cardholders for using credit cards instead of bank accounts.
- Coordination Rather Than Competition: The UKPI Model
The FCA is aware that regulation alone cannot create a market.
Accordingly, the UK Payments Initiative (UKPI)—formed by 31 industry participants—and the commercial VRP scheme are being explicitly supported. The message is clear: open banking is no longer merely a "compliance obligation"; it must become a commercial product that can be priced, delivers return on investment, and is profitable.
- Conclusion
In the UK, the first live payments under the UKPI scheme are expected to commence in the first quarter of 2026.
According to the FCA, the global payments ecosystem is moving away from a card-centric structure toward a model in which the bank account is at the centre.
At this point, it should also be noted that card schemes, in order to preserve their market position, have begun to launch products on the A2A side that function in a scheme-like manner—even though they are not card-based processes. Visa's recent A2A model in the UK is a notable example.
In summary, open banking is advancing, while card schemes are increasingly pursuing A2A payments.
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