Two U.K. regulators said Thursday (Jan. 23) that an independent company, Open Banking Limited, will play a key role in advancing the effort to launch open banking-powered variable recurring payments.
The company will help establish an independent central operator to coordinate how those payments are made, the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) said in a Thursday (Jan. 23) press release.
“We support it in doing that, working with industry and trade associations, and look forward to significant progress being made in 2025,” the regulators said in the release. “This will see live services available for consumers to make recurring payments to utility companies, government and financial services firms.”
Adding variable recurring payments to open banking services will allow consumers to take greater control of their regular payments, reducing the risk of unexpected expenditure, and will give businesses more choice in how they receive payments, which could help reduce processing fees by creating more competition among payment methods, per the release.
The FCA and PSR added in the release that they are also working with industry and trade associations to aid the development of commercial arrangements underpinning both these payments and the use of open banking for eCommerce.
“We thank the industry for their continued support and engagement in the success of open banking so far and we will continue to work together constructively as we implement the next steps,” they said in the release.
The PSR said in August that after putting forth a “call for views” that included proposals for how it could support an expansion of variable recurring payments, the feedback it got showed support for coordinating the expansion through a multilateral agreement (MLA), along with concerns about the need for an MLA and whether it should include a central price.
An FCA letter sent last week to Prime Minister Keir Starmer stated that, in tandem with the PSR, the authority is eyeing the debut of variable recurring payments.
It was announced in July that open banking had 10 million active users in the U.K. — a figure that is 15% of the country’s population — and that the total was up from just six million 18 months earlier.
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