Open Banking Brings a Challenge to Card Dominance in Payments

Open banking platform TrueLayer recently commissioned independent research to examine open banking in the UK and EU. The report outlining the findings of this research clearly shows that:

  • Open banking payments are growing fast. Although open banking payment solutions were initially slower to develop, they are now rapidly accelerating as they gain in popularity.
  • E-commerce payments are also growing consistently. The share of e-ecommerce in sales has increased from 2.8% in 2006 to 36.5% in 2020. COVID-19 has served to further accelerate this growth.
  • Greater competition from open banking payment solutions will benefit merchants and consumers. Open banking solutions will help break the monopoly-like stranglehold card solutions have over merchants. This is expected to result in lower fees for merchants, greater payment security and more convenience for consumers.
  • International non-card payments show there is appetite for card competition. Non-card payment methods have gained wide adoption recently. With open banking, these methods can scale across Europe more easily and challenge the dominance of cards.

Dig deeper into the report here.