What are account-to-account payments?

In their simplest form, account-to-account payments move money directly from a payer’s bank account to a payee’s bank account without the need for intermediaries, such as credit or debit cards. As people use cash less, digital payments have grown significantly. New ways of making digital payments are becoming available to more people – such as Apple Pay and Google Pay. However, the bulk of these payments still go through the existing card systems (usually Visa or Mastercard) rather than customers paying retailers directly from their bank account.

This means retailers may only have a limited number of payment options to offer their customers.

Our work so far

The majority of payments in the UK are ‘spontaneous payments.’ These include payments for bills and invoices, large non-regular transfers such as tax payments, and retail transactions for purchasing goods and services.

For retail transactions there are currently limited options for using account-to-account payments. However, some providers have started using account-to-account payment systems to offer such payments for some online stores. This has been helped by the introduction of open banking, which allows people and businesses to link their accounts with third parties offering payment services – providing a secure and cost-effective alternative to using card networks. We think unlocking the potential of account-to-account payments, including through open banking, could introduce more competition in the long term – which should help ensure fair prices and innovative services.

We've carried out an in-depth analysis to understand the opportunities – and barriers – associated with account-to-account as a retail payment option. We identified that open banking had the clear potential to facilitate account-to-account payments for retail transactions and compete with card systems.

However, our analysis showed a series of barriers to greater adoption of account-to-account payments for retail transactions. We think there are four areas that could be improved further:


Operational and technical standards meet the functional requirements for retail transactions. This, for example, includes the ability for the retailer to support subscription payments.


Consumers are suitably protected when making account-to-account payments. All parties involved in the transaction act together to minimise payment risks, and put in place the right processes to ensure that people feel safe when using account to account payments because they know what will happen if things go wrong.

Sufficient access and reliability

People and businesses feel comfortable making and accepting account-to-account payments because they are quick and convenient. This means that there is sufficient availability across the end-to-end journey for a retail transaction and customer drop-outs are at a low level.


Account-to-account payments support competition and provide commercial opportunities for businesses involved in the transaction. A sustainable pricing model for retail transactions ensures firms can continue to invest in new products and further innovation that benefits people and businesses.

This is a complex and significant challenge, and we expect account-to-account payments to continue to develop over the next few years. However, we need to act now to make sure that the infrastructure, rules, and incentives within account-to-account payments continue to foster innovation and competition. We’ve published a blog setting out our thoughts in more detail, and will continue to communicate on the topic over the coming months.

The future of open banking and the Joint Regulatory Oversight Committee

Open banking has led to greater competition and innovation in UK retail banking. We want to build on the initial success of UK open banking to help unlock further benefits for consumers, businesses, and the wider economy. Open banking should continue to support innovation and greater competition for consumers and businesses. Critical to this will be establishing an appropriate successor to the Open Banking Implementation Entity (OBIE), which has played a central role in developing the UK’s open banking ecosystem. It is important that its successor is overseen effectively, including by the PSR.

Together with the Competition and Markets Authority (CMA), the Financial Conduct Authority (FCA) and the Treasury, we've been working to provide a shared vision for the future oversight of open banking. We published this in a joint statement in March 2022. This also set out cross-authority work through a Joint Regulatory Oversight Committee (the Committee) to, among other things, unlock the potential of open banking payments – including through consideration of the four areas we’ve outlined above.

More information about the Committee and how it will engage with stakeholders is available here.