Open Banking

What is open banking?

Open banking is a process where banks and financial institutions make customer data accessible to authorised third parties — with the customer’s consent. It has led to the development of new financial applications and payment methods, improving transparency and choice for both businesses and customers.

What is an example of open banking?

A common example is bank-to-bank transfer, which allows customers to make direct payments from their bank account without needing to enter sort codes or account numbers. Payments can be made on desktop, mobile, or via a banking app — and are free from the risk of chargebacks and card-not-present (CNP) fraud.

What are the benefits of open banking?

• Increased security — transactions are authenticated using the customer’s online banking credentials or app, rather than card details.
• Lower fraud risk — no card details are entered during the payment process, eliminating the risk of CNP fraud.
• No chargebacks — customer identity is verified at the point of payment, removing the need for chargeback fees or administration.
• Faster cash flow — payments reach businesses within seconds.
• Convenience — customers can pay from any device using their banking app or online banking.

Is open banking safe?

Yes. Customers control which third-party providers can access their data, and access is granted through secure authentication methods such as two-factor authentication or biometrics. Open banking also complies with strict regulations — in the UK and EU, it is governed by the Payment Services Directive 2 (PSD2), which sets out requirements for data protection, security, and fraud prevention.

Who uses open banking?

Anyone who consents to share their financial data can use open banking. Customers benefit from fast, secure bank-to-bank payments without needing a debit or credit card. Businesses benefit from instant settlement, reduced fraud risk, and no chargebacks.

Which banks support open banking?

All banks in the UK and European Union are required by regulation to support open banking. This includes major high street banks such as Barclays, Lloyds, HSBC, and Santander. The specific services offered may vary by bank, but all must comply with open banking regulations.

How many countries have open banking?

Over 50 countries have implemented or are in the process of implementing open banking policies. Early adopters include the UK, Australia, Canada, Singapore, and many countries across the European Union.

What is the difference between banking and open banking?

Traditional banking services are provided solely by banks. Open banking allows authorised third-party providers to access bank data and infrastructure, enabling them to build new financial products and services on top of existing banking systems.

What is VRP?

VRP (Variable Recurring Payments) is a UK Open Banking feature that allows customers to authorise trusted third parties to make recurring payments directly from their bank account. It is a more flexible alternative to Direct Debits, giving customers greater control over the timing and amounts of automated payments.

What is cVRP?

cVRP (Commercial Variable Recurring Payments) is an Open Banking payment method that lets customers authorise businesses to take recurring payments of varying amounts directly from their bank account. Unlike Direct Debits, cVRP uses secure APIs and customer-defined limits, offering more flexibility and control over automated payments.