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British payment authorities are weighing industry feedback on plans to give bank transfers a bigger role online.
British payment authorities are currently considering industry feedback on plans that could give bank transfers a more prominent place in online spending. HM Treasury's consultation on new payment rules ended on 6 October, while the Bank of England's consultation on new payment systems closed in September. The British government has promised to lay open banking laws before the end of 2026.
Proposals from both consultations aim to give consumers and businesses a wider range of payment options. This includes bank-to-bank payments alongside the more traditional card options at online checkout. Nothing is final yet, and any new payment systems are likely years away.
What is being proposed
The Treasury laid out its plans on 14 July, proposing moving much of the existing rulebook for payment firms out of law and into the control of the Financial Conduct Authority (FCA). It also suggested a single FCA-led framework for open banking as a replacement for the current patchwork of rules.
The plans would give the FCA powers over open banking standards, and the different paid-for schemes businesses are building on top of them. The Treasury also raised the discussion of whether banks should be allowed to impose fair fees on some forms of access that are currently free. The Payments Forward Plan, published in February 2026, said a response would be given in the fourth quarter of 2026.
In July, the government pledged to lay new open banking legislation by the end of 2026 under the Data (Use and Access) Act 2025. This would give the FCA the power it needs to set new open banking rules. The FCA has pledged to consult on these new, long-term rules before the end of the year.
The Bank of England works alongside this process, focusing on underlying systems rather than the rules. Between 25 June and 11 September, a board chaired by the Bank consulted on a new core system to replace the existing systems behind Faster Payments and Bacs.
These plans include bank-to-bank payment at the point of sale, both online and in shops. These would stand as a new option alongside cards. The minutes from the 8 September meeting called the early feedback constructive and largely supportive of the plans. The Bank also said the system's design would pass to a new industry-owned delivery company in spring 2027.
The delivery company launched a share sale on 15 September. Sky News reported that it aims to raise around £50 million to fund work until 2028. Britain's four biggest high street banks are among the project's backers.
Why bank-to-bank payments are in focus
Bank-to-bank payments, also known as account-to-account payments, move money directly from one bank account to another. Open banking means these payments do not need to move through third-party card networks, allowing a regulated firm to initiate a payment directly from a shopper's bank account, as long as the shopper approves the request.
Open banking use is growing, with Open Banking Limited, which sets current technical standards, reporting that monthly payments surpassed 40 million in May 2026, the first time that has happened. This figure covers both one-off and recurring payments. The FCA puts the total number of users at approximately 17 million.
The government says the reforms aim to set clear, fair rules while encouraging competition and new ideas. It also wants strong protection for customers. The Bank of England echoes this intent, aiming to build a reliable and trusted infrastructure while offering shoppers more choice. These aligned goals set the project's direction, but they do not determine how any payments will be priced or protected.
What it could mean for online businesses
For online vendors, the plans could introduce a new checkout payment option. They could also encourage payment firms to compete more for business. However, this will all depend on the final rules, the systems created and the rate of adoption among banks and businesses.
The potential expansion of account-to-account transactions comes as online businesses already support a mix of traditional and newer payment methods. Retailers, travel platforms and gambling operators frequently offer various payment options, including bank transfers, cards and digital wallets. That variety is reflected in a rundown of casino payments from CasinoHawks, which highlights how payment choices can vary within a single industry.
What remains uncertain
Several important questions remain unanswered. UK Finance, which represents banks and payment firms, backed the Bank of England's general direction in its consultation response. However, it raised the point that moving the current Faster Payments and Bacs processes to a new system would be complex.
The trade body also pointed out that the business model and rules regarding bank-to-bank payments at the till still need some work. It said these elements must be settled alongside the core systems and not after the fact. The FCA has separately said that open banking needs a solid commercial footing before it can expect to grow.
The full scope of the proposed systems remains open. The Bank of England's consultation only addressed the core layer that clears and passes payment messages. It did not touch on what products shoppers would see. Pay.UK runs the current interbank systems, and this is set to continue while the new solutions are finalised and built.
Increasing the number of ways to pay does not necessarily mean bank transfers will appear at more online checkouts immediately. Both sellers and payment firms will consider costs, demand and practical points such as refunds and dispute resolution guidelines. The Treasury expects to draft the legal changes sometime between 2027 and 2028.
What happens next
The government has pledged to lay the proposed changes to open banking legislation before Parliament by the end of 2026, and the Treasury expects to issue its consultation response sometime in the fourth quarter. The FCA's long-term open banking consultation is also due before the end of the year, ahead of the Bank of England's planned design handover in spring 2027.
