Recent research by emerchantpay reveals a surprising disconnect in the UK payments landscape: a majority of consumers are unaware of Open Banking despite actively utilizing it. The study, which polled over 2,000 UK consumers, indicates that over half have never heard the term “Open Banking,” yet nearly half of those individuals admitted to using it after learning its definition.
This disconnect highlights a significant opportunity for merchants and financial institutions alike. Open Banking, a system that allows secure data sharing between financial institutions and third-party providers, is poised to surpass Buy Now Pay Later (BNPL) in adoption over the next five years, according to the study. Notably, a projected 32% surge in usage is expected among young adults aged 25-34.
The benefits of Open Banking align closely with consumer priorities, offering enhanced security, privacy, and speed during online transactions. However, a lack of awareness and education remains a barrier to wider adoption. The study found that two-thirds of respondents have never received communication from their banks regarding Open Banking.
“The opportunities Open Banking offers to merchants are boundless,” says Jon Horddal, Chief Product Officer at emerchantpay. “However, it’s evident that there’s a lack of awareness of Open Banking as a term. To reap the rewards, merchants need to start including Open Banking payments at checkout, alongside an explanation.”
The research also underscores the role of banks in educating consumers about Open Banking and its advantages. By raising awareness and building trust, both merchants and financial institutions can unlock the full potential of this innovative payment method and drive its adoption in the UK market.
