Article

Open Banking Payments: A Big Step Forward for Everyday Payments

20 February 2026

Contactless payments needed almost a decade of product development and millions of daily tap‑ins on the TfL network before they became part of our everyday routines. Open banking is still only eight years old, yet 2026 is already shaping up to be a ground-breaking year for UK open banking innovation.

The recent launch of an open banking payment option on Amazon and eBay marks an important shift: this payment method is moving from early adoption into the mainstream. Powered by secure, regulated open banking technology, Pay by Bank allows people to pay directly from their bank account with no card details to enter and no lengthy information to type in, just a quick approval of the payment followed by authentication in their banking app/online banking using strong authentication methods such as Face ID, fingerprint or a secure passcode, as required by UK law.

As more major retailers adopt it, open banking payments will continue to become more widely recognised by shoppers. Other terms used across the industry include ‘instant bank transfer’, account-to-account (A2A) payment, direct bank transfer and bank transfer via open banking. All describe the underlying mechanism.

What Is Pay by Bank?

Open banking payments (sometimes called “Pay by Bank”, instant bank transfer or account to account payments) allow people to pay online by initiating a secure bank‑to‑bank transfer directly from their bank account. Instead of typing in card numbers, customers simply choose “Pay by Bank”, select their bank, and authenticate the payment in their banking app using face ID, fingerprint, or a secure passcode.

Behind the scenes, a regulated Payment Initiation Service Provider (PISP) takes consent for the payment and then connects the retailer to the customer’s bank using secure open banking APIs. The payment then normally moves instantly via the UK’s Faster Payments network.

It’s quick. It’s secure. And increasingly, it’s available in places where millions of people shop every day.

Why Pay by Bank Is Gaining Momentum

The arrival of Pay by Bank on platforms like Amazon and eBay is a clear signal of progress: real‑world, everyday purchases powered by account‑to‑account payments, at scale.

This milestone belongs to the whole ecosystem; banks, fintech companies, merchants, technology platforms, regulators and policymakers, who have worked over many years to build the standards, governance and reliability needed for payments like this to work for millions of users.

It’s another step in open banking moving from headline to habit.

Benefits for Shoppers

Consumers want payments that are fast, secure, and easy to use. Pay by Bank delivers on all three:

  • No card details required: No lengthy details to complete.
  • Biometric‑grade security: Authentication happens within your own banking app/online banking.
  • For UK shoppers, this means fast, secure payments without entering card details
  • Instant movement of money: Payments and refunds once approved by the merchant, usually arrive immediately thanks to Faster Payments.
  • Clear visibility of your bank balance: You know exactly what you’re spending before you proceed with the payment.

Most importantly, open banking payments give people more choice at checkout, sitting alongside cards and digital wallets as another safe, convenient way to pay.

Benefits for Merchants

For retailers and SMEs, open banking payments offers a set of compelling advantages:

  • Lower payment processing costs
  • Compared with traditional card fees, account‑to‑account payments can be more efficient.
  • Reduced exposure to fraud and eliminates chargebacks
  • Authentication happens through the customer’s bank using Strong Customer Authentication.
  • The journey is fast, payment details prefilled by regulated providers, and free from card expiry failures.
  • Fast settlement
  • For UK shoppers, this means fast, secure payments without entering card details
  • Money normally arrives instantly, helping cashflow, especially for small businesses.

These benefits explain why adoption is accelerating, and why large brands are now validating the model for millions of shoppers.

Understanding the Current Payments Landscape

Open banking payments is secure by design: customers authenticate directly with their bank, no sensitive card numbers are shared, and transactions use long‑established bank‑to‑bank infrastructure.

Open banking payments benefits from the wider set of UK protections that apply across digital payments today. Customers continue to benefit from safeguards for unauthorised or incorrect transactions, alongside the usual consumer rights that apply to goods and services, regardless of whether they pay by card, digital wallet or Pay by Bank. Many retailers also offer their own customer service and refund processes, which apply whichever payment method a shopper chooses. Because open banking payments normally uses near real‑time bank transfers, approved refunds typically reach customers quickly, and the balance visibility offered within banking apps can help people keep track of their spending.

More choice at checkout is good for consumers and the wider market.

And as open banking continues to evolve through industry, regulatory and government collaboration, work is underway on future enhancements that can further support good outcomes across digital payments.

Today, Pay by Bank offers a secure, straightforward way to make everyday purchases, working alongside cards and digital wallets as part of a modern, flexible UK payments landscape.

Why This Moment Matters

The appearance of open banking payment options across major online retailers shows how years of standards development, engineering work and ecosystem collaboration are now delivering intuitive, real‑world payment experiences at scale.

This is innovation in action: an architecture built over years of engineering effort, now enabling real‑time, intuitive payment experiences for millions of people.

Payment providers and fintechs across the ecosystem continue to translate regulatory requirements into practical user journeys and support the expansion of secure, account‑to‑account payments.

As open banking moves toward its next phase, with upgrades to Faster Payments, wider use of Variable Recurring Payments, and the future of open finance, open banking payments are becoming a standard payment method alongside cards and digital wallets.

The story is still unfolding, but 2026 will be remembered as the year open banking payments became real for everyday shoppers and a powerful example of what the UK’s open banking ecosystem can achieve together.

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