Open banking in 2025: trends shaping the future of payments

Open banking is no longer a novel trend — it’s becoming a popular payment method among consumers, and open banking data is leveraged widely across industries. What started from PSD2 legislation in Europe has now grown into the mainstream with adoption accelerating and new technologies like AI taking open banking a step further.

Lasma Kuhtarska, Co-founder, and Chief Strategy Officer at Noda shares her insights into the open banking trends for the upcoming year 2025, and what they mean for e-commerce merchants.

Adoption to continue growing

“Open banking will become even more popular, especially in Europe and the UK, where adoption is already quite high,” said Kuhtarska. “In the UK, 13% of digitally active consumers and 18% of small businesses are using open banking services, as of 2024. This number is set to grow further.”

Kuhtarska highlighted that nearly 1 in 5 small businesses now use open banking to streamline payments and manage their finances. This growing adoption creates opportunities for merchants to optimise their payment processes. It also helps them stay competitive in markets where open banking is becoming the norm.

Payments or data?

"There's a dynamic shift between open banking payments, or pay-by-bank, and data products that analyse consumer transactions," said Kuhtarska. "In 2023, payments became more widely adopted than data for the first time, yet data spiked again in 2024 due to the open banking integration by Apple Wallet.”

Kuhtarska explained that small businesses still tend to favour data services, which opens an opportunity for them to leverage payments. However, data services are regaining momentum as well as we head into 2025.

Artificial Intelligence

Artificial intelligence (AI) has been the new shiny toy of the tech world over the past two years, and while the initial hype is fading, its practical benefits in open banking are clear, according to Kuhtarska.

"AI already plays a crucial role in open banking payments by improving fraud detection and offering more accurate financial analytics of transaction data,” she explained. “It can offer personalised recommendations and supports affordability checks. Businesses can use these insights, based on real spending patterns, to better tailor their marketing campaigns.

Open banking payments for subscriptions

Variable recurring payments (VRPs) are the latest innovation of open banking that is set to gain traction a lot more in 2025, according to Kuhtarska. They let customers pay varying amounts at regular intervals without the use of cards or direct debits, but straight from their account.

“Open banking has primarily focused on one-off payments, but VRPs are gaining momentum, especially in the UK, thanks to regulatory developments,” said Kuhtarska. “Non-commercial me-to-me payments are already mandatory, and the UK is moving to expand this to non-sweeping commercial payments in low-risk scenarios in 2025. Banks like NatWest and HSBC are already testing this technology. VRPs are set to take off as open banking account-to-account payments are a cost-effective alternative for both consumers and merchants by bypassing the high fees of card networks.”

PSD3

Regulation has always been a major driver of fintech trends. According, to [surname], 2025 will bring a new wave of regulatory updates — or at least clarity about the future framework.

“The final version of PSD3, which is an update on the PSD2 regulation that for the first time mandated open banking in Europe, is expected by late 2024 or early 2025. Currently, the drafts are under review, but from what we’ve seen, PSD3 will mandate stricter SCA security. It also will seek to improve API functionality, for smoother integration and more consistent adoption across EU states,” she said.

New industries and more innovation

According to Kuhtarska, open banking will keep expanding into new industries well beyond 2025, especially with advancements in AI and machine learning. While it's already widely adopted in finance, insurance, tech, e-commerce, and real estate, the trend is now reaching into climate tech.

“It’s incredible to see some climate tech companies using open banking data to track and manage carbon footprints,” Kuhtarska added. “And we’re only scratching the surface. We’ll see even more creative and impactful uses for open banking in the future.”