The UK Government is planning to implement open banking within the GOV.UK Pay system. This is part of a larger initiative to enhance current payments functionalities for government services.
Amanda Dahl, Deputy Director of Government Digital Services announced the news last week and said the government is exploring ways to offer open banking services, including how consumers pay for services with their banking app.
“GOV.UK Pay already offers Apple Pay and Google Pay to central government digital services, but soon we’re releasing the same mobile wallet payment types to local authority services and this will be a great benefit to people who are paying for government services on the go, like paying for Clean Air Zone charges,” Dahl wrote in a blog post.
So far, GOV.UK Pay has incorporated 163 services over the last 12 months, allowing them to accept payments via online digital services. According to Dahl, 23 million payments were processed during this time, valued at £1.3 billion.
Open Banking Is Revolutionizing the Financial Industry
Open banking is continuing to make waves across the financial space. For the first time, consumers have control over their own financial information and how it’s being used. Banks are also benefitting as this exact consumer data is critical to creating a more customized and streamlined customer experience.
We’ve seen the space continue to evolve over the past few months, most recently with Klarna who decided to bring its open banking brand Klarna Kosma under its corporate brand. The Swedish company reported that monthly transactions surged by more than 200% on the open banking platform.
A recent PaymentsJournal podcast also discussed the current state of open banking and how many of the key players within the United States are made up of traditional financial institutions, fintech companies, and third-parties, such as neobanks. .
Open banking can be one solution for growing concern over security, particularly as no party is allowed to gain access to a consumer’s private information without their permission. As the space continues to evolve, we’ll see extend security efforts, including from the Consumer Financial Protection Bureau (CFPB), which is currently drafting guidelines and frameworks to further educate users on consent control and usage.