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The FCA has published a progress report on open banking which says
that open banking in the UK is growing rapidly.

According to the FCA, latest industry figures show there are
more than 16 million users now benefiting from the service. The
number of open banking payments has increased by 53% year-on-year,
reflecting a significant shift in how consumers and businesses
manage their finances.

It seems that a key driver of this transformation is the rise of
variable recurring payments (VRPs), which now
account for 16% of all open banking transactions. VRPs allow
consumers and businesses to set up flexible, automated payments
tailored to individual needs, offering greater control compared to
traditional direct debits.

In 2025, the FCA made seamless account-to-account payments a
major focus, working closely with industry leaders to accelerate
innovation. It says it has seen significant progress towards this
goal.

Before the end of 2025, the UK Payments Initiative (UKPI), a new
company formed by 31 firms to enable VRPs, will be set up. This is
another new way to open up access to making flexible payments for
consumers and businesses. Momentum is building across the market,
with other organisations developing their own VRP schemes and
transaction testing underway.

UKPI will operate a commercial VRP scheme, enabling consumers to
make flexible, recurring payments to businesses such as utility
providers. These services are already helping customers with
irregular incomes to manage payment schedules more effectively. The
idea is that this scheme will enable a larger group of customers
and businesses to access these services.

The first live payments under the UKPI scheme are expected in
the first quarter of 2026, signalling the start of a new era for
payments and open banking in the UK.

Regulatory changes

The FCA will continue to support industry in the rollout of
VRPs. Looking ahead, the sector is preparing for regulatory
changes.

The Treasury is expected to introduce legislation in 2026 that
will grant the FCA new powers to set open banking rules, and it
plans to consult on new rules for the long-term regulatory
framework before the end of 2026. This aims to foster a stable
regulatory environment and a competitive and innovative market.

The FCA wants the ecosystem to be resilient, secure and
responsive to new challenges – like improving reliability,
error messaging, and ensuring adequate consumer protections.

The FCA has set out its strategic approach to the new rules which
includes five key goals:


Accessible and valuable to consumers

Ensures safety and security

Scalable and responsible

Interoperable; and

Promotes competition and innovation.

The FCA says that for industry, the expansion of open banking is
unlocking new opportunities for competition, efficiency and
innovation. This helps to drive better services, sustainable
commercial models and a more dynamic payments market.

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