Open Banking Limited reports that March 2025 hit a new high of 13.3 million open banking active users, which it says equals 18.4% (1 in 5) of people and small businesses with online access to their current account. The same report defines open banking active as either using an open banking data connection in that month or making at least one open banking payment in that month, so it’s measuring real use, not vague awareness.
If you’re a UK merchant (or you build payments for merchants), that matters for a simple reason: more customers now arrive at checkout already comfortable paying directly from their bank app.
This article breaks down what PSPs really need to deliver in 2026: a practical Pay by Bank plus cards stack that feels easy for customers, stays tidy for finance teams and is ready for the next wave of recurring bank payments.
Cards Still Rule
Cards are still the default behaviour in the UK and that’s not a problem to solve. UK Finance says 48.8 billion payments were made in 2024 (excluding CHAPS) and card payments accounted for 64% of all payments. It also reports 18.9 billion contactless debit and credit card payments in 2024, which tells you how strongly customers value tap-and-go simplicity.
So when merchants ask for Pay by Bank, they’re rarely asking to swap one rail for another. They’re asking you to add a new option without adding new headaches.
That’s why modern is less about having more payment buttons and more about what happens after the click: settlement visibility, refund handling, reconciliation, customer support and reporting that doesn’t force a merchant to run two separate back offices. It’s also why PSPs tend to look for platforms that bundle those operational pieces with optimisation and risk controls, similar to a payment platform for PSPs. Treat cards as the stability layer and Pay by Bank as an additional lane that can win when it’s the best fit for that customer and that transaction.
Pay by Bank That Actually Pays Off
Pay by Bank is already scaling enough that it deserves grown-up operational design, not a side-project integration. Open Banking Limited reports 27.2 million open banking payments in March 2025 (based on CMA9 reporting), calling it a record high and stating it represents 67% year-on-year growth. It also shows open banking payments reaching 7.0% of Faster Payments Single Immediate Payments by March 2025 and explains its method: CMA9 open banking payment volumes expressed as a proportion of the total FPS Single Immediate Payments using Pay.UK data, which excludes non‑CMA9-originated open banking volumes.
The opportunity for PSPs is to make that growth feel unremarkable in a merchant’s daily workflow.
That means building Pay by Bank so it behaves like a well-run card flow: clear confirmation, clean identifiers and straightforward exception handling when something doesn’t complete. UK Finance’s numbers hint at why merchants will keep caring about this: Faster Payments and other remote banking totalled 5.6 billion payments in 2024 and became the UK’s second most-used payment method.
A single, merchant-friendly stack is where the real value shows up. Here’s the checklist that tends to separate available from useful:
- One integration for cards and Pay by Bank, so merchants don’t maintain two separate technical paths.
- Smart routing and fallbacks, so a Pay by Bank attempt can gracefully switch to card without restarting checkout.
- Consistent reporting fields across methods (order ID, customer reference, fee lines), so finance teams don’t stitch data together by hand.
- Reconciliation that matches how merchants actually close books (status, timestamps, references and settlement visibility in one place).
- Support-friendly transparency, so staff can answer where’s my money? with facts instead of guesswork.
Get those right and Pay by Bank stops being another thing to manage and becomes another way we get paid.
The Repeat Purchase Moment for Pay by Bank
One-off checkout is only half the story. The bigger prize is recurring payments that customers can set up quickly, understand easily and manage without friction.
That’s where Variable Recurring Payments (VRPs) come in. The FCA says VRPs now account for 16% of all open banking transactions and describes them as allowing flexible, automated payments that can be tailored to individual needs, offering more control compared with traditional direct debits.
Just as importantly, the timeline is no longer distant. The FCA says the UK Payments Initiative (UKPI) will operate a commercial VRP scheme and that the first live payments under the UKPI scheme are expected in the first quarter of 2026. The FCA and PSR’s Dec 2025 update adds that phase 1 use cases include utilities, financial services and payments to local and central government.
From a PSP perspective, VRPs are a practical design challenge in a good way. They push platforms to treat consent, limits and ongoing payment visibility as first-class features, not optional extras.
There’s also a straight acceptance reality check worth appreciating early. In that same Dec 2025 update, the regulators note that industry participants suggested, on average, at least 75% current account coverage is needed for cVRPs to reach scale. That nudges PSPs toward a balanced approach: build VRP-ready capabilities, but keep card and other fallbacks polished, because merchants will judge the total experience.
And maybe that’s the point. Recurring Pay by Bank shouldn’t feel like a leap of faith. It should feel like a natural extension of a stack merchants already trust.
The Stack Merchants Will Thank You For
In 2026, the winning payment stack won’t be the one with the most jargon attached to it. It’ll be the one that lets merchants add Pay by Bank without reworking their operations and lets customers choose what feels easiest in the moment.
The encouraging part is that the adoption trend supports this direction. Open Banking Limited says that if recent growth continues, it anticipates one-quarter of accounts will be open banking active in the first half of 2026.
Keep cards strong, make Pay by Bank operationally boring in the best sense and treat VRPs as the capability that brings recurring value into everyday merchant workflows. With customer familiarity rising and commercial VRPs moving toward live scheme payments in early 2026, why offer merchants a choice between rails when the platform can make both feel like one coherent system?
