British financial regulators have cleared an open banking project by the UK Payments Initiative (UKPI).
The Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSA) announced Tuesday (Jan. 20) that they will not prioritize a competition investigation into the centralized “access fee” pricing model being developed by the UKPI for commercial variable recurring payments (cVRPs).
Per the announcement, cVRPs are an emerging form of open banking technology that let customers give trusted third parties secure and recurring access to their accounts to manage payments on their behalf.
The goal is to offer consumers and businesses control and convenience, while providing businesses with lower-cost, more flexible payment options.
“After engaging with the funders of the UKPI, we and the PSR worked at pace to clarify our enforcement position on the UKPI’s proposal for a commercial model and consulted with the CMA about our planned non-prioritisation statement given concurrency arrangements,” the FCA said in its announcement.
“The statement will give UKPI certainty to continue developing its cVRP product – including for certain regulated financial services, utilities and public sector payments – without delay. This supports our strategy to make cVRPs a reality, giving people more control over their payments and lower processing fees for businesses.”
Last year marked a milestone for open banking in the U.K., with data showing that a third of the country’s adults now use open banking services.
The data from Open Banking Limited showed that more than 15.6 million people and businesses use services powered by open banking. In July of last year, open banking services were used a record 2.04 billion times, up 3.5% increase from the prior month.
Open banking adoption has climbed steadily year over year, with total users increasing by 34% in the last year, per a news release.
“This data shows how open banking is now part of everyday life for millions of people and businesses across the U.K., from paying taxes to shopping online. It’s fast, secure and built on trust,” Open Banking Limited CEO Henk Van Hulle said in the release.
As PYMNTS CEO Karen Webster noted in a recent column, adoption in the U.S. and Europe remains more modest, with surveys showing that open banking transactions enjoy only low single‑digit shares of total consumer payments.
“Interest, though, is material, with roughly 40% of U.S. consumers saying they would consider pay by bank, especially younger cohorts, for those purchases they consider everyday, debit card purchases,” Webster added.