At Money20/20 today, UK Payments Initiative Ltd (UKPI),  a consortium of the UK’s biggest banks and fintechs, launched a scheme designed to advance the next generation of open banking payments. This launch marks a turning point in providing scalable, consistent alternatives to traditional card-based and direct debit payment methods in the United Kingdom.

Richard Koch, Managing Director of UK Payments Initiative, said, “This marks a defining moment for the next evolution of payments in the United Kingdom. This is about creating a payment model that works better for everyone, giving people more control and reducing friction for businesses. Our commercial approach will allow us to develop from these first customer journeys to subscription models and wider ecommerce.”

This is the first in almost 20 years since Faster Payments in 2008 was introduced. It supports the next generation of open banking payments.

Rapid growth of open banking payments and the need for recurring solutions

Open banking payments have experienced rapid adoption in recent years, with industry data indicating over 37 million payments processed monthly. However, the majority of these transactions are one-off payments. UKPI’s new industry-led scheme addresses this gap by enabling recurring and automated payments to businesses and government entities, designed for widespread adoption and scalability.

The scheme allows consumers to approve regular or variable payments directly from their bank accounts without sharing card details or using traditional direct debit methods.

Payments can only be collected within limits explicitly agreed upon by the consumer, providing enhanced control over who can collect money, the amounts authorised, and the duration of the permission.

The UKPI scheme, built with input from banks and fintech companies, sets a common rulebook and standards for automated account-to-account payments using open banking technology. Initial use cases include payments to government bodies, utilities, charities, and financial services.

Building consumer trust and safeguards

Consumer trust is essential to the scheme’s design. The framework includes safeguards and dispute resolution processes to protect consumers and build trust among all participants.

Launching and joining the scheme would help banks and fintechs lower payment costs for businesses, simplify payment processes, improve consumer security, and create new innovation opportunities in the UK economy.

Aligned with UK Government’s National Payments Vision

The scheme supports the ambitions outlined in the UK Government’s National Payments Vision by enabling new use cases for open banking payments at scale. 

Major UK banks, building societies, and fintech firms are backing the initiative. The rulebook has been finalised, and the scheme is moving towards market rollout after successful testing.