The FCA has published a progress report on open banking which says that open banking in the UK is growing rapidly. 

According to the FCA, latest industry figures show there are more than 16 million users now benefiting from the service. The number of open banking payments has increased by 53% year-on-year, reflecting a significant shift in how consumers and businesses manage their finances.

It seems that a key driver of this transformation is the rise of variable recurring payments (VRPs), which now account for 16% of all open banking transactions. VRPs allow consumers and businesses to set up flexible, automated payments tailored to individual needs, offering greater control compared to traditional direct debits.

In 2025, the FCA made seamless account-to-account payments a major focus, working closely with industry leaders to accelerate innovation. It says it has seen significant progress towards this goal.

Before the end of 2025, the UK Payments Initiative (UKPI), a new company formed by 31 firms to enable VRPs, will be set up. This is another new way to open up access to making flexible payments for consumers and businesses. Momentum is building across the market, with other organisations developing their own VRP schemes and transaction testing underway.

UKPI will operate a commercial VRP scheme, enabling consumers to make flexible, recurring payments to businesses such as utility providers. These services are already helping customers with irregular incomes to manage payment schedules more effectively. The idea is that this scheme will enable a larger group of customers and businesses to access these services.

The first live payments under the UKPI scheme are expected in the first quarter of 2026, signalling the start of a new era for payments and open banking in the UK.

Regulatory changes

The FCA will continue to support industry in the rollout of VRPs. Looking ahead, the sector is preparing for regulatory changes.

The Treasury is expected to introduce legislation in 2026 that will grant the FCA new powers to set open banking rules, and it plans to consult on new rules for the long-term regulatory framework before the end of 2026.  This aims to foster a stable regulatory environment and a competitive and innovative market.

The FCA wants the ecosystem to be resilient, secure and responsive to new challenges – like improving reliability, error messaging, and ensuring adequate consumer protections.

The FCA has set out its strategic approach to the new rules which includes five key goals:

• Accessible and valuable to consumers
• Ensures safety and security
• Scalable and responsible
• Interoperable; and
• Promotes competition and innovation.

The FCA says that for industry, the expansion of open banking is unlocking new opportunities for competition, efficiency and innovation.  This helps to drive better services, sustainable commercial models and a more dynamic payments market.