The FCA and the Payment Systems Regulator (PSR) have set out the next steps for open banking, which include a new independent company to drive forward variable recurring payments.
Open banking currently has over 11.7 million active users and over 22.1 million open banking payments made monthly.
There was significant progress in developing open banking in 2024, including new open banking services such as variable recurring payments.
As a step towards using open banking payments for e-commerce, variable recurring payments will help consumers to take greater control of their regular payments by allowing them to control how much can be paid at one time or over the course of a month, reducing the risk of unexpected expenditure.
For businesses, variable recurring payments offer greater competition to current payment methods and could help reduce processing fees. They could also increase the proportion of customers who complete a payment, through better user experiences.
As a result, the regulators have announced the creation of a new independent operator for variable recurring payments.
Open Banking Limited will play a key role in establishing an independent central operator to coordinate how variable recurring payments are made.
This will see live services available for consumers to make recurring payments to utility companies, government, and financial services firms.
