There is strong market potential for merchants who prioritise the adoption of Open Banking payments early in their payment strategies. That is according to research released by emerchantpay.
The survey of UK consumers found that one in two people are unknowingly using Open Banking during checkout, 51% of the UK population being unfamiliar with the term Open Banking.
Once consumers were informed about what Open Banking is, 45% of respondents that had not heard of the term claimed they had in fact used Open Banking for purchases. This suggests that the term is not widely recognised, but Open Banking payments are actively being used by consumers. Of those who had heard of it, usage increased significantly to 58%, indicating that, once understood, consumers are eager to use Open Banking solutions.
The outlook for Open Banking is also positive, 19% of respondents saying that they will use Open Banking more frequently in 5 years’ time. This compares to 14% saying the same for Buy Now Pay Later (BNPL) and 7% for crypto. Merchants in many sectors can leverage the opportunities of Open Banking, with 44% of respondents saying they would use it for online retail, 36% for utility bills, 34% for hotels, 30% for airline tickets, and 25% for online subscriptions.
“It’s evident that there’s a lack of awareness of Open Banking as a term”
Younger consumers demonstrated more awareness of Open Banking, with 25–34-year-olds most likely to have heard of it at 45%. There is also an anticipated 32% surge in the use of Open Banking payments among 25–34-year-olds over the next five years.
Jon Horddal, Chief Product Officer at emerchantpay said: “The opportunities Open Banking offers to merchants are boundless, with it providing many features that consumers are currently seeking and demanding at the checkout. However, it’s evident that there’s a lack of awareness of Open Banking as a term.
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“To create a win-win situation for consumers and merchants, there needs to be more education as to what it means and what its benefits are, from both the merchants themselves, but also from banks. Many of the key features consumers want are available via Open Banking, but merchants need to be better equipped to demonstrate these benefits to consumers.
“To reap the rewards that Open banking has to offer, merchants need to start including Open Banking payments at the checkout, alongside an explanation, to see the sort of consumer adoption we’ve experienced in the past with new payment methods, such as BNPL and eWallets.”
