Open Banking is a revolutionary solution that has recently shifted the frontiers of payments. Specifically, projections show that the phenomenon is set to accelerate in the coming years, with the value of Open Banking transactions estimated to hit US$57 billion globally by 2023. Further to this, Open Banking APIs are estimated to reach 580 billion worldwide by 2027, signifying a huge revenue opportunity for businesses.
Our new report, Chapter one: Open Banking – Pushing the frontiers of payments, uncovers current consumer attitudes and preferences towards Open Banking based on a survey we commissioned for over 2,000 UK consumers. We also highlight the benefits that merchants can reap from being early-adopters of Open Banking, from improved checkout experiences to minimised chargebacks.
Consumers are unknowingly already using Open Banking
Despite the UK being the first country to adopt Open Banking, interestingly many UK consumers remain oblivious to its existence. In fact, our survey revealed that around one in two (51%) respondents were unfamiliar with the term ‘Open Banking’. However, interestingly, upon finding out the definition of Open Banking, close to half of UK respondents claimed to have used it to make purchases.
When taking a closer look at purchase intentions of UK consumers, 42% of respondents said they’re likely to use Open Banking for in-store payments, while 37% said they’re likely to make online payments this way. Online retail purchases, utility bill payments and airline tickets were found to be the most popular types of purchases for Open Banking payments. This emphasises the versatility of Open Banking payments and how it can be used to tap into new markets, allowing merchants to galvanise their payments performance.
Open Banking aligns with many consumer demands at the checkout
There are many different factors influencing a consumer’s decision to make an online payment. Our research unveiled that security was the leading influence, with close to two-thirds (60%) of UK respondents stating this was the case. Next up was privacy (41%), speed (38%) and convenience (34%) – all of which Open Banking can support. Further to this, when asked about the importance of accessing real-time information about their bank account balance, it was revealed that 85% of respondents said this was important to them. Open Banking holds a strong potential to appeal to changing consumer payment preferences, with its transparency being a unique point of difference to other non-banking payment methods.
Open Banking’s projected to outpace other well-known payment options
According to our research, cards will continue to be the main payment method of choice over the next five years, with 22% of respondents stating this was the case. However, Open Banking payments followed closely behind this, with 19% of UK consumers showing a likelihood to increase their adoption in five years’ time, followed by Buy Now Pay Later (14%), manual bank transfers (13%) and crypto (7%). Furthermore, there’s potential for Open Banking transactions to capture market share away from other mainstream payment methods like Buy Now Pay Later in the future.
Open Banking’s projected to outpace other well-known payment options
According to our research, cards will continue to be the main payment method of choice over the next five years, with 22% of respondents stating this was the case. However, Open Banking payments followed closely behind this, with 19% of UK consumers showing a likelihood to increase their adoption in five years’ time, followed by Buy Now Pay Later (14%), manual bank transfers (13%) and crypto (7%). Furthermore, there’s potential for Open Banking transactions to capture market share away from other mainstream payment methods like Buy Now Pay Later in the future.
Stefanie Renz-Schreiner, Senior Business Development Manager at emerchantpay, comments:
“The payments industry is currently experiencing some exciting changes, shaped by new payment innovations enabled by Open Banking. Its unique payment offering presents a multitude of benefits for businesses, from minimised chargebacks to improved payment experiences. To remain agile and stay at the forefront of change, businesses can leverage this up-and-coming payment protocol to appeal to shifting consumer payment preferences and enhance business growth.”
Unlock new opportunities for business growth with Open Banking
emerchantpay is a global payment service provider and acquirer with over 20 years of experience in making payments easy for businesses. We’re empowering businesses to accept payments seamlessly with our Bank transfer (Open Banking) solution, which is just one of over 60 payment methods we currently offer.
Download your copy of the Chapter one: Open Banking – Pushing the frontiers of payments, and unlock vital insights on how Open Banking can be used to create a future-proofed payment strategy, while elevating the payment experiences of customers.
Find out more about how Open Banking can benefit your business by contacting our payments experts.