One in five Brits are now making regular payments via Open Banking (21%) according to research carried out by Moneyhub.
Open Banking payments allow users to make a payment directly through their phone’s banking app or online banking account directly to another account, which can be a quicker and more cost-effective alternative to other payment options such as card payments, standing orders or direct debits.
While cards remain the dominant payment method on the high street and online, businesses are exploring alternative options for their customers, often triggered by high acquiring costs and settlement delays which are impacting cashflow.
The stranglehold that direct debits overwhelmingly have in the regular bill payment sector (where 70% of Brits use this payment method for their regular bills) will be challenged as Open Banking’s variable recurring payments become an option.
Open Banking payments are increasing in prevalence and relevance. Indeed, Moneyhub’s research comes following figures showing that Open Banking payments hit a milestone earlier this year, hitting 11.78m transactions in September, with the number of active payment users surging by 68.2% in July 2023 compared to the same month the previous year.
This alternative payment method is increasingly being used by the younger generations with 29% of 16-24 year olds and 26% of 25-34 year olds making payments using Open Banking. In comparison, just 13% of those aged over 55 years old use Open Banking payments.
Interestingly, close to half of those that classed themselves as full time students (44%) are using Open Banking to make regular bill payments.
Mark Munson, MD of Moneyhub’s Payment Division comments: “The world of payments is constantly evolving, and the Smart Payment revolution that Open Banking enables is set to shake up how we manage our regular bill payments. Fifty years ago we would have seen payment by cheques or cash as the predominant tool to pay for bills, then direct debits and standing orders grew into popularity.
Now, Open Banking is set to join the fold. Quicker, more efficient, offering greater flexibility and largely more cost-effective for both the merchant and customer, Open Banking payments are readily being embraced by a new generation of consumers.
With new, innovative and more flexible propositions coming to market, Open Banking has demonstrated that early adopters of those services, not only demand a greater choice in what they are buying, but how they are buying it. They are not wedded to payment solutions that are of their parents, or grandparents generation.”
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Notes to editors
Contacts
Georgina Willison
Marketing Director, Moneyhub
georgina.willison@moneyhub.com
Sam Munton
Account Manager, Teamspirit (Moneyhub PR Agency)
Smunton@teamspirit.co.uk
M: 07919228097
Research Methodology
Research conducted by Censuswide among 2000 nationally representative consumers. The research fieldwork took place between 29th September to 3rd October 2023. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct which is based on the ESOMAR principles.
About Moneyhub
Moneyhub is a data, intelligence, and payments company which develops ISO 27001 certified software for Open Banking, Open Finance, and Open Data applications. Its FCA-regulated Open Data platform enables companies to quickly and easily transform data into personalised digital experiences and initiate payments. Its APIs and fully customisable platform provide data aggregation, insights, notification nudges, and payment systems. As a result, clients have the consent-driven data and analytics they need to create super-personalised offers, products, and services. Hundreds of organisations, spanning finance to media and retail, rely on Moneyhub’s award-winning technology.