Despite early promise, open banking in the UK has yet to fulfill its potential — especially when compared to traditional card payments — according to a recent report by the Financial Times (FT).
While open banking has delivered some benefits, such as accelerating lending decisions, the numbers reveal a stark contrast in usage. In March 2025, open banking enabled 27 million transactions in the UK. In comparison, the Payment Systems Regulator recorded 1.92 billion card transactions in February alone — highlighting the continued dominance of card-based payments.
Open banking technology allows users to securely share financial data with third-party apps, banks, and retailers. It also supports direct “pay-by-bank” transfers, bypassing card networks like Visa and Mastercard. This innovation was expected to drive a wave of competition and efficiency in the financial sector, especially after the 2008 crisis, helping the UK become a global FinTech hub.
Indeed, London emerged as a hotbed for FinTech innovation, home to major players like Revolut and a top destination for investment — second only to the U.S. However, many UK FinTech companies are still struggling to turn a profit, and rising interest rates have dampened investor appetite.
One major barrier to wider adoption of open banking is simple awareness. Many consumers don’t know the technology exists, and those who do often don’t see the value — especially as digital wallets like Apple Pay already offer convenient, seamless payments.
“The problem isn’t that open banking doesn’t work,” said Riccardo Tordera-Ricchi, Director of Policy at the Payments Association. “It’s that other payment methods already work really well.”
This sentiment is echoed in recent research from PYMNTS Intelligence and Trustly, which found that 56% of U.S. consumers are unfamiliar with pay-by-bank options. However, the study also revealed a path forward: offering incentives. When cashback or loyalty rewards were introduced, consumer interest in pay-by-bank rose by 72% — even among those initially uninterested.
The study further identified Gen Z and high-income individuals as particularly responsive to incentives, making them prime targets for early adoption campaigns.
In summary, while open banking holds significant promise, widespread usage will likely depend on increased consumer education and compelling incentives. Until then, traditional payment methods — especially card-based ones — remain firmly in control.
