What Are Open Banking Platforms?
Open banking platforms are providers that enable merchants to accept open banking payments, or use open banking data products.
These providers are licensed under PSD2, and they are able to access customer transaction data from banks, under user consent.
How Open Banking Platforms Work
Open banking platforms must be licensed to access bank data and process payments.
There are two main types of licenses:
- PISP (Payment Initiation Service Provider): Allows businesses to initiate payments directly from a customer’s bank account. This powers pay-by-bank transactions, bypassing card networks and reducing fees. Customers authorise payments through their banking app, ensuring security and control.
- AISP (Account Information Service Provider): Grants access to financial data across multiple bank accounts with user consent. This enables services like budgeting apps, financial dashboards, and credit assessments by aggregating account balances, spending history, and income patterns.
Open banking platforms follow strict compliance rules, ensuring data is shared safely and only with customer permission.
Key Benefits of Open Banking Platforms
Open banking platforms offer major advantages for businesses, banks, and consumers. Here’s why they are gaining traction:
Faster and Cheaper Payments
Traditional card payments involve multiple intermediaries, leading to high fees and slow processing.
Open banking enables direct A2A payments often referred to as pay-by-bank, reducing costs and speeding up settlements.
Enhanced Security
Since data sharing happens between banks and open banking platforms via regulated APIs, fraud risks are lower.
Users authenticate transactions through their bank’s interface and security, reducing exposure to card fraud.
Better Financial Insights
With the innovation of open banking platforms, consumers can connect multiple accounts to budgeting and finance apps, gaining a clearer view of their spending, savings, and investments. Businesses also benefit from better financial analytics.
Improved Customer Experience
With open banking, users can make payments, apply for loans, or access personalised financial services without paperwork or long wait times. Everything happens digitally, in real time.
Future of Open Banking Platforms
Open banking is evolving fast, driven by new regulations, rising demand for cost-effective payments, and advancements in financial technology.
Here’s what’s coming next:
More Businesses Will Adopt Open Banking Payments
With rising card fees, businesses are looking for cheaper, more efficient alternatives.
A2A (account-to-account) payments – powered by open banking – are becoming a preferred choice for e-commerce, subscriptions, and B2B transactions.
In the UK, pay-by-bank transactions jumped from 320,000 in 2018 to 224 million in 2024, showing rapid adoption.
Embedded Finance Will Become the Norm
Financial services will be built directly into everyday apps, from checkout flows to lending and insurance.
Open banking APIs will power these seamless experiences, allowing users to make payments or access financial products without leaving the platform they’re using.
Cross-Border Payments Will Expand
Right now, open banking is mainly used for domestic payments, but instant international transactions are on the horizon.
The EU’s Instant Payment Regulation (IPR) will require banks to process euro payments within 10 seconds, 24/7, removing delays and making cross-border A2A payments more competitive.
Personalised Financial Products Will Take Off
Lenders, investment firms, and budgeting apps will use open banking data to offer tailored financial services.
Users will get custom loan rates, smarter investment recommendations, and better budgeting tools based on their real-time financial data.
Regulations Will Strengthen Security
As adoption grows, governments will introduce stricter compliance rules.
PSD3, set for 2026, will force banks to provide high-performance APIs, remove access barriers, and improve security.
Consumers will benefit from better data protection, while businesses will gain more reliable access to banking infrastructure.
What’s Next?
With the global market set to hit $164.8 billion by 2032, open banking is becoming a mainstream payment method.
As regulations push for faster, more secure, and cost-effective transactions, businesses that adopt open banking early will have a competitive edge.
Final Thoughts
Open banking platforms are transforming payments and financial services.
Businesses are switching to pay-by-bank to cut costs and improve cash flow.
Consumers benefit from faster, more secure transactions without card fees or delays.
New regulations like PSD3 and the EU’s Instant Payment Regulation are pushing banks to upgrade their systems, making open banking even more reliable.
With global adoption rising and the market set to reach $164.8 billion by 2032, now is the time for businesses to embrace open banking.
The future is clear – faster payments, lower fees, and a better user experience.
Businesses that adopt open banking today will lead the way in the new era of digital payments.
