UK Finance notes in an update that it brought the payments industry together to “consider the future opportunity for open banking payments and how the market could collaboratively shape that future.”
There are now more than 2.5 million Open Banking payments every month compared to only around 320,000 in the whole of 2018, and the recommendations in the report “will help support the development of more products and services for consumers.”
The key recommendations, according to UK Finance, are as follows:
- Governance. There should be further development of open banking payment standards, “supported by industry governance and an associated technical group.” This should be “considered following the CMA’s decision on open banking governance and a successor body to the Open Banking Implementation Entity.”
- Multi-lateral industry framework. There is “a case for exploring a voluntary framework for open banking payments – without which there could be fragmentation in the market. Roles, responsibilities and liabilities.”
As stated in the comprehensive report:
“Open banking payments have been identified by HM Treasury, the Competition and Markets Authority and the Payment Systems Regulator as a new way of paying that offers greater choice to customers and merchants. They have noted the predominance of card-based payments for e-commerce transactions and that open banking and interbank payments could offer more competition in the market.”
Open banking payments are “a relatively new way of making a payment,” the report noted.
A major pillar of the Final Open Banking Roadmap “relates to improving the customer experience of open banking payments,” the report added.
It also mentioned that the Final Roadmap was “agreed in spring 2020 – at the time there were concerns about the performance and stability of the APIs and consent rates.”
The Trustee’s proposals, accepted by the CMA, were “therefore intended to improve performance, fill in the gaps in payment functionality and enable greater user adoption.” the update explained.
As noted in the update:
“More than one year on, and as the OBIE moves towards its completion of the Roadmap, the management information on the performance and availability of the open banking APIs shows an average weighted availability of 99.7 per cent and improving consent rates have been reported.
The report added that a critical metric in assessing the performance of open banking payments is that the payment journeys “complete successfully – they convert.” A major pillar of the current Roadmap has been “on consent success rates – given its criticality to the ecosystem this will be the subject of ongoing review,” the report added.
You may access the complete report here.