Open banking explained for businesses: UK, EU and US
Open banking lets you share your bank data with other apps, and lets apps start payments from your account, with your permission. Here is how it works in the three biggest markets and where it saves a business time.
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Open banking is the plumbing behind a lot of tools businesses already use: the bank feed in your accounting software, the "pay by bank" button at some checkouts, the instant account check when you sign up for a service. It works differently in each major market, and that affects what is available to you.
What it is
With your permission, a licensed third party can:
- read account information, such as balances and transactions, or
- initiate a payment from your account, which you then approve in your banking app.
You approve access through your own bank's login screen. The third party never sees your password, and you can withdraw consent.
The UK
The UK started early. In 2017 the Competition and Markets Authority ordered the nine largest banks to build standard open banking APIs, overseen by an implementation entity. Today millions of people and businesses use it, and pay-by-bank payments have become a common alternative to cards for bills, tax and larger purchases.
The EU
The second Payment Services Directive (PSD2) required banks across the EU to give licensed account information providers and payment initiation providers access to payment accounts. Standards vary more between banks than in the UK. The EU is working on a successor package, including a Payment Services Regulation, intended to make access more consistent.
The US
The US relied for years on data aggregators that often logged in with customers' credentials. The Consumer Financial Protection Bureau finalized a rule under section 1033 of the Dodd-Frank Act in 2024 to require standard access, then moved to reconsider it in 2025. In practice, US access still runs largely through private agreements between banks and aggregators.
How businesses use it
| Use | What it saves |
|---|---|
| Bank feeds into accounting software | Manual imports and typing errors |
| Pay-by-bank checkout | Card fees and chargebacks |
| Verifying a customer's account | Micro-deposits and days of waiting |
| Cash position across banks | Logging in to several banks to see balances |
For a business that gets paid by transfer, pay-by-bank can also reduce the payee-name mismatches and wrong references that slow down reconciliation. Our remittance advice guide covers the matching side.
Limits to know
- It is national or regional. There is no single global open banking system.
- Coverage of business accounts can lag behind personal accounts.
- Pay-by-bank payments are usually final, like other bank transfers. See instant payments compared.
Accounts on Rivet
Rivet gives a company local account details in USD, and in EUR and GBP on Growth, so customers in those markets can pay by bank transfer, including pay-by-bank tools that send a domestic transfer. See Bank accounts.
Questions people ask
What is open banking?
A system in which banks let licensed third parties, with the customer's permission, read account information or initiate payments through secure APIs. The customer never shares their banking password with the third party.
Is open banking safe?
In the UK and EU, providers must be authorized by the regulator, and access needs the customer's explicit consent, given through their own bank's login. Consent can be withdrawn at any time. Check that any app you connect is on the regulator's register.
What is pay by bank?
A checkout option where the customer pays straight from their bank account through an open banking payment initiation, in place of a card. For the merchant it usually costs less than card acceptance and has no card chargebacks.
Does open banking work across borders?
Each market's rules cover banks in that market. A UK app can connect to UK banks, and an EU provider to EU banks. Some providers connect in several markets, but there is no single global system.
Sources
Rashidatou writes Rivet's guides to how money moves between countries: the payment rails, what each one costs, and the account details a company needs to get paid in another currency. Every figure in Rashidatou's articles is traced to the scheme rulebook, the regulator or the provider's published price list, and those sources are listed at the end.
More from Rashidatou K. →This article is general information, not legal, tax or financial advice. Rules and fees change; check the sources above and the provider’s current terms before you act on them.
- open banking
- pay by bank
- psd2
- section 1033
- bank feeds
