UK Banks and Fintechs Join Forces to Launch New Payment Scheme

WHY THIS MATTERS

The official launch of the UK Payments Initiative Ltd (UKPI) open banking scheme at Money20/20 Europe on June 2, 2026, represents the most critical structural upgrade to the United Kingdom’s financial infrastructure since Faster Payments went live nearly twenty years ago. Open Banking has enjoyed massive growth across the UK, steadily climbing to over 37 million transactions per month. However, that growth hit a hard technical ceiling: the overwhelming majority of those transactions were restricted to single, one-off payments.

Today at Money2020, UK Payments Initiative Ltd (UKPI) launched a scheme designed for the next-generation of open banking payments, marking a turning point in the availability of alternatives to traditional card-based and direct debit payments. 

Open banking payments have grown rapidly in recent years, with more than 37 million payments processed per month according to industry data – but most of these are one-off payments. The new industry-led scheme changes that, enabling recurring and automated payments to businesses and government, in a way that is consistent, scalable, and designed for widespread adoption. 

For consumers, this means being able to approve regular or variable payments directly from their bank account without sharing card details or relying on traditional direct debit. Payments can only be taken within the limits agreed by the consumer, giving them greater control over who can collect money, how much can be taken, and how long that permission lasts. 

Developed collaboratively with banks and fintechs, UKPI’s scheme establishes a shared rulebook, commercial model and operational standards for flexible, automated, or recurring account-to-account payments, powered by open banking. These payments can be used initially for payments to the government, utilities, charities, financial services, and more. 

Richard Koch, Managing Director, UK Payments Initiative said: “This marks a defining moment for the next evolution of payments in the United Kingdom. This is about creating a payment model that works better for everyone, giving people more control and reducing friction for businesses. Our commercial approach will allow us to develop from these first customer journeys to subscription models and wider ecommerce.” 

Consumer trust is foundational to the scheme’s design and the framework also includes safeguards and dispute processes to protect consumers and support trust across participants. 

By launching and participating in the scheme, banks and fintechs are working together to reduce payment costs for businesses, streamline payment friction, and enhance security for consumers, while unlocking new opportunities for innovation across the UK economy. 

The new scheme is also intended to support the ambitions set out in the UK Government’s National Payments Vision by enabling new use cases for open banking payments at scale. 

The participation of major UK banks and building societies alongside fintech firms reflects the breadth of support behind the company. The scheme’s rulebook has been finalised between participating institutions, with the initiative now moving into market rollout after successful live proving. 

FF NEWS TAKE

The activation of the UKPI scheme turns Open Banking from a speculative consumer utility into a robust, high-volume enterprise financial network. For years, the UK e-commerce landscape has operated under a costly paradox: merchants lose a massive portion of their margins to the Visa and Mastercard duopoly, yet they tolerate these fees because legacy Direct Debits are too slow, carry high processing latencies, and lack real-time balance authorizations.

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