This transition has helped shape interaction patterns between traditional and emerging actors in the payments marketplace. As such, Open Banking will be a game-changer for business model innovation in the face of customer demands for improved financial products and services.
Open Banking Market Development
According to the latest worldwide market study by Juniper Research, the value of global payment transactions facilitated by Open Banking will exceed $116 billion in 2026 — that’s up from just under $4 billion in 2021.
The research identified Open Banking-facilitated payments, where payments are made directly from bank accounts, as a growing threat to the dominance of cards within eCommerce.
While card payments are well established, leveraging permission for others to access bank accounts can reduce fraud risks due to strict Know Your Customer (KYC) rules. Juniper analysts recommend payment providers partner with Open Banking API providers now to reduce risks of disintermediation.
The new market study also found that Europe will account for over 75 percent of Open Banking payments users globally in 2026 — demonstrating the head start that PSD2 has given this market.
“While PSD2 is a great starting point, it is not the end goal for Open Banking – supportive regulation must be a platform for much greater innovation. The race is on for vendors to build the most compelling capabilities for the future of Open Finance,” said Damla Sat, industry analyst with Juniper Research.
The research study found that recent governmental support within the U.S. market will stimulate the growth of Open Banking, and the market will require payments players to develop new capabilities quickly to capitalize.
As such, Juniper analysts anticipate that acquisitions and partnerships will intensify, so vendors can meet these evolving requirements more rapidly, rather than developing their own solutions over time.
That said, I’m encouraged that governments are now supporting Open Banking innovations. The global financial services marketplace needs new fintech pioneers to create open APIs that enable third-party developers to build applications and services around a financial institution.
This evolution enables greater financial transparency options for account holders ranging from open data to private data. This will give those account holders full control of their financial data to make it easier for them to switch banks and other traditional lenders.