Open Banking is becoming more prevalently known to merchants according to new research by emerchantpay, even if customers are still not aware they are using it.
The survey revealed that more than half (51%) of UK consumers are unknowingly using Open Banking payments during checkout and are unfamiliar with it. However, upon knowing of its presence, 45% of respondents not knowing said they had in fact used it before for prior purchases.
Despite this, Open Banking is still growing within the commerce and retail sector. 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, with nearly a fifth (19%) of respondents saying that they will use Open Banking more frequently in five 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.
Younger consumers demonstrated more awareness of Open Banking, with 25 to 34-year-olds most likely to have heard of it (45%). There is also an anticipated 32% surge in the use of Open Banking payments among 25 to 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.
Banks have a part to play in increasing awareness and trust in Open Banking. Two thirds (66%) of survey respondents stated that they had never received communications from their bank regarding Open Banking, while only 17% recalling that they had been notified about it (17% were either not sure or did not have a banking account).
“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,” added Horddal.
“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.”
The research follows the recent news that emerchantpay has partnered with TrueLayer to offer Open Banking payments as an online checkout option for merchants across the UK and Europe.
