The UK Financial Conduct Authority (FCA) has posted an update on Open Banking. Unlike in the US, the UK has outlined prescribed requirements for financial services firms to allow customers to control their data, specifying who may access it, while providing streamlined processes for changing their financial services.
According to the regulator, open banking payments have soared by 53% year on year.
An essential driver of this change is the rise of variable recurring payments (VRPs), which now account for 16% of all open banking transactions.
VRPs allow users to set up flexible, automated payments tailored to their individual needs, offering greater control than traditional direct debits.
Before the end of this year, the UK Payments Initiative (UKPI) – a new entity formed by 31 firms to enable VRPs will launch. UKPI will operate a commercial VRP scheme that allows consumers to make flexible, recurring payments.
The first live payments under the UKPI scheme are expected in the first quarter of 2026.
HM Treasury is expected to introduce legislation in 2026 that will grant the FCA new powers to set open banking rules, and they plan to consult on new regulations for a long-term regulatory framework before the end of 2026.
