Is Open Banking the answer to Britain’s payment pain points?

By Gloria Methri

For many British businesses, managing payments is no longer just about transferring money from one account to another. It is about speed, security, cash flow visibility, and creating seamless customer experiences. And increasingly, it is about survival in a digital-first economy where inefficiencies cost not just time but trust, sales, and opportunities.

From delayed refunds that frustrate loyal customers to clunky checkout journeys that cause cart abandonment, traditional payment methods are starting to show their cracks. The cost? More than just operational friction—44% of businesses report that these inefficiencies directly contribute to cash flow issues, hindering timely payments to staff and suppliers.

So, where do businesses go from here? A growing number are eyeing open banking as the smarter, more secure alternative.

According to a new study by Payit by NatWest, 42% of British businesses say they would adopt open banking for its increased security and fraud prevention benefits. Yet, adoption remains lukewarm—28% admit they haven’t integrated open banking simply because they don’t understand it.

This gap between interest and implementation underscores a critical moment for the UK payments landscape. As payment processing challenges escalate, impacting both back-end operations and front-end customer satisfaction, businesses may be overlooking a solution that’s right at their fingertips.

A Wake-Up Call for Business Payments in the UK

The research shows that two-thirds (67%) of businesses have experienced payment-related issues that disrupt operations. At the same time, over one in five (22%) spend more than six hours each month managing and storing sensitive customer data, like card details—a security and compliance risk that open banking could eliminate.

Customer experience is also taking a hit. More than half (56%) of businesses say slow refund processes have either damaged customer satisfaction or cost them sales. Another 51% highlight the complications of their checkout journey, noting that it deters customers at the most critical point of sale.

By contrast, open banking enables real-time payments without requiring the storage of sensitive data. It also reduces friction in the checkout process, helping businesses meet evolving customer expectations for speed, simplicity, and security.

Trust in Banks Gives Open Banking a Head Start

Adoption of new financial technology hinges on trust. Encouragingly, 90% of businesses say they trust established banks to deliver secure open banking solutions. This is notably higher than the 76% who feel the same about FinTech providers, suggesting that banks may be best placed to lead the charge in helping businesses overcome hesitation and embrace change.

“Businesses are increasingly recognising the need for more efficient and secure payment methods such as open banking,” said Lee McNabb, Head of Group Payments Strategy at NatWest.

Since launching in 2020, Payit by NatWest has been a catalyst for open banking growth in the UK. Yet the full potential of open banking won’t be unlocked until the knowledge gap is addressed. As the research shows, many businesses are not held back by infrastructure or interest, but simply by uncertainty.

With the proper education and support, businesses can break through the barriers to adoption, ushering in a new era of smarter payments, stronger security, and sustainable growth.