Research finds at least 75% of PSPs and ISVs plan to implement Open Banking payments by 2025
Nuapay, EML Payments’ Open Banking and account-to-account (A2A) payments business, announces further results of research into over 250 UK payment professionals’ views on the potential for Open Banking. Of the Payment Service Provider’s (PSPs) and Independent Software Vendor’s (ISVs) that were surveyed, more than 75% of PSPs and 80% of ISVs already enable their customers to accept Open Banking payments. Furthermore, every single PSP and ISV surveyed that had not yet implemented Open Banking payments planned to do so by 2025.
On average, of the PSPs whose merchants have gone live with Open Banking, 28% of payment flows have already converted to Open Banking-based payments, compared to 20% of ISVs. 1 in 5 PSPs have already seen more than 41% of payment flows convert to Open Banking.
Brian Hanrahan, CEO, Nuapay, comments: “There’s never been a better time for PSPs and ISVs to offer account-to-account (A2A) payments and facilitate even more widespread adoption of Open Banking. It’s clear that there is appetite for Open Banking payments and it will likely surpass traditional payment methods. However, what is hindering the implementation of new payment technologies is the lack of customer understanding, time and cost requirements and lack of skills.”
Over the next five years, both PSPs and ISVs expect Open Banking to become one of the most popular ways for consumers to pay. One in four (24%) ISVs expect Open Banking to be more popular than credit and debit cards, Buy-Now-Pay-Later (BNPL), and digital wallets, as do 22% of PSPs.
As such, PSPs and ISVs expect the volume of payments that convert from traditional methods such as debit and credit cards to Open Banking to grow over the next five years. On average, ISVs expect 57% of their payment flows to have converted to Open Banking payments by 2027, representing growth of almost 185%. Similarly, PSPs expect 51% of their payment flows to have converted to Open Banking-based payments in the same time frame, equating to 82% growth.
Four in ten (40%) PSPs and ISVs expect to see greater demand for new payments technologies as merchants try to differentiate themselves from competitors and offer an enhanced checkout experience.
Ruwani Hewa, product and propositions director, Nuapay, comments: “Amid ongoing economic uncertainty and the cost-of-living crisis, the majority of PSPs, ISVs and merchants recognise that enhanced payments technology can not only provide a competitive advantage but help to build loyalty and protect their bottom line. It’s important that we support them to take advantage of technology available to adhere to demands for Open Banking-based payments from consumers, merchants and PSPs/ISVs.
Chapter Three of Nuapay’s PSP and ISV Open Banking Perceptions series, ‘Just how much potential does Open Banking hold?’ is available for download on Nuapay’s website.