Yapily’s latest report suggests business demand is driving open banking growth, but regulatory delays and API fragmentation are putting the brakes on innovation
Open banking may finally be finding its footing, but not in the way most anticipated.
While industry attention has largely focused on consumer adoption, new data from infrastructure provider Yapily suggests it is businesses, not retail users, leading the charge.
At the heart of this shift lies a feature with transformative potential: variable recurring payments (VRPs).
According to Yapily’s Unlocking the Open Banking Opportunity report, recurring business flows, such as subscriptions, payroll, and SME expense management, are fast emerging as the next frontier.
But with commercial VRPs still largely unavailable, the sector risks stalling just as momentum begins to build.
Business use cases drive adoption, but at what cost?
As of March 2025, the UK has 13.3 million open banking users, up 40% on the previous year. Payments have grown steadily since 2020, hitting 31 million in March 2025, now accounting for about 1% of Faster Payments.
Beneath these figures, however, lies a more nuanced story. The bulk of new adoption is coming from SMEs and corporates using open banking for real-time cash flow insights, account-to-account payments, and risk checks, not from individual consumers.
This pivot toward business-led use cases may finally give open banking the commercial grounding it needs. But it also raises questions. If consumer traction remains modest, is open banking delivering on its original promise of empowering individual users? Or is it simply becoming another back-office efficiency tool for enterprise finance?
“Open banking has the potential to enrich people’s payment experiences beyond other payment methods. We’ve seen steady adoption so far, but the real challenge is achieving faster growth so that open banking delivers on its full potential,” says Stefano Vaccino, founder and CEO of Yapily.
VRPs could redefine recurring payments—if they are allowed to
Among Yapily’s key assertions is that VRPs, particularly in their commercial form, could fundamentally disrupt the way businesses handle recurring payments. Compared to direct debits or card-on-file methods, VRPs promise lower costs, real-time settlement, and enhanced control for end users.
However, uptake has been hampered by the current regulatory framework, which only mandates banks to support VRPs for sweeping between a user’s own accounts. Non-sweeping use cases – those most relevant to the commercial sector – remain optional and patchily supported.
This is a critical sticking point. Without broader bank adoption and regulatory clarity, VRPs risk becoming a half-built bridge: structurally sound, but going nowhere. Yapily’s call for mandatory support is timely, but whether it gains traction with policymakers remains to be seen.
“Rolling out new features like cVRP faster and creating a clear, trusted brand complete with an industry trustmark for open banking payments will encourage adoption,” explains Nicole Green, VP Product strategy, Innovation and Policy at Yapily.
“But first agreeing on a consumer protection model that works for both consumers and merchants is a priority for open banking. Rather than copying old, flawed models – such as chargebacks – we need to find a model that helps merchants to thrive and consumers to trust this new payment option.”
Fragmentation continues to undermine user experience
Despite growth in raw numbers, the open banking experience remains far from frictionless. The report highlights persistent disparities in API quality, inconsistent data standards, and wide variability in user experience across banks. These issues are not new, but their continued presence is a drag on the ecosystem.
For payment service providers and tech platforms, this inconsistency translates directly into commercial risk. Poor API performance or confusing UX doesn’t just frustrate developers; it reduces conversion, increases customer support costs, and can even expose firms to compliance breaches.
This suggests a broader systemic issue: while open banking may be legally mandated, its implementation is far from standardised. Without a stronger push for harmonisation, either through regulation or industry collaboration, the benefits will remain unevenly distributed.
Regulatory clarity could determine open banking’s trajectory
Yapily positions the UK’s Joint Regulatory Oversight Committee (JROC) and Europe’s upcoming PSD3 legislation as key to the next phase of open banking. Both frameworks aim to extend functionality, improve access to data, and bring clarity around commercial models.
But the report stops short of offering a timeline, or a roadmap for bridging the current gap between policy ambition and bank readiness. This lack of precision is troubling. In a landscape moving at fintech speed, vague regulatory horizons are obstructive.
Firms waiting on guidance to invest in VRP infrastructure or advanced open banking use cases may find themselves in a holding pattern well into 2026. For challengers and incumbents alike, regulatory ambiguity is quickly becoming one of the biggest barriers to innovation.
“The fundamental building blocks are in place. The challenge now is turning those ingredients into a compelling, unified proposition… Yapily has taken a bold step forward with a proposed roadmap — now it’s time for the industry to come together and build on that momentum,” said Nilixa Devlukia, Chair of the Open Finance Association.
