Open Banking payments: proven infrastructure, but not yet the B2B rail of choice

The UK’s late payment problem is usually discussed in terms of behaviour, power imbalance and policy. That is understandable. The Commercial Payments Bill, and the wider debate around 30-day and 60-day settlement terms, is fundamentally about whether large buyers should be able to use suppliers as a source of working capital.

But there is another question sitting just beneath the surface. If government and regulators want invoices paid faster, what payment rails are actually capable of supporting that change?

Cards, Direct Debit, Faster Payments, Bacs and CHAPS are already deeply embedded in UK business payments. Open Banking has now joined that list of options. The proposition is attractive, offering  account-to-account payments, lower processing costs, no card number to store, strong customer authentication through the payer’s own bank, and faster settlement.

So, is Open Banking payment initiation, or PIS, now a credible B2B payment option at scale? Or is the real Open Banking success story still mostly about account information services, or AIS?

The answer matters because Open Banking is often discussed as if it is one market. It is not. AIS and PIS solve very different problems.

AIS has been the standout success. It allows regulated third parties to access bank account data with customer consent. That has clear use cases like affordability checks, credit decisioning, accounting feeds, cashflow tools, account aggregation, SME lending, income verification and financial management. AIS does not usually ask the customer to change how they pay. It quietly improves decisioning, data access and workflow.

PIS is different. It asks the payer to use a new payment journey. That means behaviour change. At checkout, the consumer has to choose Pay by Bank instead of card or wallet. In B2B, the finance team has to choose it instead of Faster Payments, Bacs, Direct Debit, commercial card or virtual card. That is a much harder adoption challenge.

The numbers show the distinction clearly.

Open Banking Limited reported that the UK ecosystem recorded 24.0 billion successful API calls in 2025, up 27% on 2024. That is serious scale. It also reported 351 million Open Banking payments in 2025, up 57% year on year, and 16.5 million user connections by December. These figures show that Open Banking is no longer an experiment. It is a functioning national payments and data infrastructure.

But the split matters. AIS still accounts for roughly four out of every five successful API calls. PIS is growing faster at 53% year on year, but from a much smaller base. That tells that Open Banking is proven, but it is still weighted heavily towards data access rather than payments.

Now compare that with the wider UK payments market.

UK Finance reported 48.6 billion payments in the UK in 2024. Debit cards accounted for 26.1 billion transactions. Credit cards accounted for around 5 billion. Faster Payments and other remote banking payments totalled 5.6 billion. Direct Debit accounted for 4.7 billion. Businesses, including commercial organisations, government and not-for-profits, made around 4.6 billion B2B payments.

Against that backdrop, 351 million Open Banking payments in 2025 is impressive growth, but not yet at a critical mass. Even if every Open Banking payment were B2B, which they are not, the total would still be less than 8% of the UK’s 4.6 billion B2B payments reported for 2024. Compared with cards, it is tiny. 351 million is a little over 1% of the combined debit and credit card transaction volume in the UK.

That is not a criticism. New payment methods do not become mainstream overnight. But it is a useful reality check.

The merchant proposition for Open Banking payments is genuinely compelling. For the payee, the attraction is obvious through lower processing costs than cards, fewer chargebacks, no card expiry failures, no card credentials to store, and potentially faster funds availability. For high-volume, low-margin merchants, billers and platforms, this can be meaningful.

The onboarding point is also important. A business accepting Open Banking payments does not become a “card merchant” in the traditional acquiring sense. It typically works with a Payment Initiation Service Provider, gateway or payment orchestration provider. That may avoid parts of the card acquiring stack that means no merchant service charge model in the same form, no card scheme rules in the same form, no PCI card-data burden in the same way.

But it is not frictionless. The provider will still need to perform KYB, financial crime checks, risk assessment and operational onboarding. The merchant still needs integration, customer support processes, refund handling, reconciliation, reporting and exception management. If Open Banking is offered alongside cards, Direct Debit and bank transfer, the merchant also has to manage another payment option within its payment stack.

So the onboarding question is not simply, is it easier than card acquiring? In many cases, yes, it may be simpler. But the more important question is, why would the payer choose it?

That is where B2B is more difficult than consumer checkout.

A business buyer making an invoice payment already has established options. Faster Payments is familiar, quick and available through online banking. Bacs is embedded in payroll, supplier runs and finance systems. Direct Debit is trusted for recurring collections, especially where the supplier controls the collection cycle. Cards and virtual cards bring credit, controls, rebate, dispute rights, reporting and working-capital value. CHAPS handles high-value time-critical payments.

Open Banking PIS must therefore offer more than “a cheaper click for the merchant”. That is not enough to make a buyer change behaviour. The buyer may not care that the supplier’s acceptance cost is lower. In fact, if the buyer is paying by commercial card, the buyer may actively value the card economics, working-capital benefit and protection.

For B2B, Open Banking PIS becomes interesting when it is embedded into workflow. Not just “Pay by Bank” at checkout, but “pay this invoice, to this verified account, with this remittance data, through this approval chain, with immediate confirmation, automatic reconciliation and lower fraud risk.” That is where the rail could matter.

In that context, Open Banking could play a role in invoice settlement, supplier portals, AP automation, tax payments, public sector collections, marketplace payouts, account verification before Faster Payments, and variable recurring payments for business services. Its future in B2B is less likely to be a standalone button and more likely to be part of a richer payment orchestration layer.

Variable Recurring Payments could be particularly important. Direct Debit is extremely successful because it solves a commercial problem. The biller can collect money without asking the payer to manually approve every transaction. But Direct Debit is not perfect. It is relatively slow, has return risk, and can feel blunt for flexible or usage-based payments. Commercial VRP (cVRP) could offer a more modern alternative for some recurring business payments, combining customer consent, flexibility and account-to-account movement.

That said, cVRP is still developing. The FCA and PSR have highlighted progress, and the UK Payments Initiative (UKPI) is expected to help create a cVRP scheme. But until there is broad coverage, consistent rules, predictable liability, strong dispute handling, and easy integration into billing and accounting systems, it will remain a promising development rather than a universal B2B replacement for Direct Debit.

So, Open Banking is absolutely proven in the UK. AIS is the clearest success story. PIS is proven as a functioning and growing payment capability, but not yet proven as a mainstream B2B payment rail at the same level as cards, Faster Payments, Direct Debit or Bacs.

For suppliers, Open Banking payments should be considered. The cost proposition is compelling, especially for lower-margin payments. For buyers, the proposition needs more work. Businesses do not make payments simply because a rail is cheaper for the recipient. They choose payment methods based on convenience, control, reconciliation, protection, cashflow, credit, auditability and habit.

That has direct relevance to the Commercial Payments Bill. If the UK wants to reduce late payment, payment rails matter, but alone, they will not solve the problem. Faster settlement requires incentives, enforceable terms, better invoice approval workflows, and payment methods that serve both sides of the transaction.

Cards have a role where buyer protection, credit, chargeback, data and working capital matter. Faster Payments has a role where speed and familiarity matter. Direct Debit has a role where recurring collections matter. Bacs remains embedded in bulk business payments. Open Banking PIS has a role where low-cost, authenticated, account-to-account payment can be embedded into a better digital journey.

The mistake would be to present Open Banking as a universal replacement. The opportunity is to position it as one more credible rail in a richer B2B payments ecosystem, particularly where it can be combined with AIS, Confirmation of Payee, e-invoicing, AP automation, Request to Pay and, eventually, cVRP.

Open Banking has already won the infrastructure argument. The next question is whether it can win enough payer-side utility to become a habitual B2B payment choice.