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UK SMEs cautious but curious about open banking

Tuesday, July 15, 2025 — 16:17:37 (UTC)

London, UK – Tuesday, 15th July 2025: New research from The Payments Association, a trade group representing the payments sector, has revealed a dynamic yet fragmented landscape for A2A payments, enabled by open banking infrastructure, among UK small and medium-sized enterprises (SMEs), highlighting both a growing interest in payments innovation alongside a need for education on the opportunities and risks A2A payments present.. In a survey of 500 senior decision-makers across UK SMEs, The Payments Association found that while awareness of open banking is relatively strong, more than a third of businesses still don’t fully understand what it entails, underscoring a pressing need for education, clear terminology and consistent messaging.

Riccardo Tordera Ricchi, Director of Policy & Government Relations at The Payments Association, said: “Account-to-account payments are clearly on the radar of UK businesses, but our research shows there’s a significant gap between awareness and understanding. To unlock its full potential, we urgently need to demystify the terminology, streamline messaging and provide tailored education that speaks to the unique concerns of different sectors.

“A2A payments, typically powered by open banking APIs, were not the original focus of open banking, which centred on improving access to financial data. As a result, frameworks for consumer protection and standardisation in payments are still evolving. Clearer guidance and stronger messaging are essential to help merchants fully realise the benefits of A2A.

“Our findings reveal a fragmented adoption landscape shaped by competing priorities – from fraud fears to functionality gaps. If we want to accelerate meaningful uptake, industry and policymakers must work together to simplify integration, boost consumer confidence and ensure the regulatory framework evolves in step with business needs.”

Key Findings at a Glance:

Over a third of SMEs are unclear about how A2A payments work. Customer experience, faster settlement, and lower fees top the list of perceived benefits. No single barrier dominates: fraud concerns, lack of consumer demand and technical complexity are cited almost equally. A2A ranks sixth out of nine in perceived payment method suitability—below cards, direct debits and digital wallets. London leads with 75% of firms having a timeline for adoption, while the Midlands and South lag behind. The survey reveals significant differences in attitudes across various industries. Retail and healthcare businesses show the greatest enthusiasm, with 58% and 66%, respectively, highlighting open banking’s potential to enhance the customer experience. In contrast, real estate and legal services firms cite security and consumer demand concerns as significant barriers.

Larger businesses (those with over £25 million in turnover) are especially interested in faster settlement times (69%), while medium-sized firms express heightened concerns about fraud, dispute processes and limited recurring payment functionality.

Notably, the survey found that “Pay by Bank App” had higher recognition than the broader term “open banking.” This suggests that simplified, consumer-facing language, alongside a consistent brand mark, could significantly improve comprehension and engagement across demographics.

Open banking adoption is poised to rise gradually over the next three years, but the road is far from straightforward. A patchwork of motivations and reservations - ranging from enhanced security to low consumer demand - means that businesses will need targeted support to move forward confidently. To drive open banking adoption, The Payments Association urges the industry to:

Communicate the wide array of benefits that open banking payments offer, clearly and consistently. Agree on consistent language and terminology when referring to open banking payments Address integration and security concerns directly. Boost consumer education and engagement. Work with regulators to clarify rules and enable greater functionality, including Variable Recurring Payments. Click here to read the report Open Banking Survey 2025: Insights from 500 UK SMEs | The Payments Association

For more information on the work and services of The Payments Association, you can visit thepaymentsassociation.org/ or contact natasha.healy@thepaymentsassociation.org

mailto:jay.bennett@thepaymentsassociation.org.

ENDS About The Payments Association The Payments Association (previously the Emerging Payments Association, or EPA) is a community for all companies in payments, whatever their size, capability, location or regulatory status. Its purpose is to empower the most influential community in payments, where the connections, collaboration and learning shape an industry that works for all. It works closely with industry stakeholders such as the Bank of England, the FCA, HM Treasury, the PSR, Pay.UK, UK Finance and Innovate Finance. Through its comprehensive programme of activities and with guidance from an independent Advisory Board of leading payments CEOs, The Payments Association facilitates the connections and builds the bridges that join the ecosystem together and make it stronger. These activities include a programme of monthly digital and face-to-face events including an annual conference, PAY360, The PAY360 Awards dinner, CEO roundtables and training activities. The Payments Association also runs seven stakeholder working project groups covering financial inclusion, regulation, economic crime, cross-border payments, open banking, digital currencies and ESG. The volunteers in these groups represent the collective views of the industry and work together to ensure the big problems facing the industry are addressed effectively. The association also conducts original research which is made available to members and the authorities. These include monthly whitepapers, insightful interviews and tips from the industry’s most successful CEOs. Media contact Ian Donegan, SkyParlour for The Payments Association ian@skyparlour.com +44 (0)330 043 1315

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Source: Company press release.

Categories: Reports and research