The value of global payment transactions facilitated by open banking is set to hit $116bn (£85bn) by 2026, research claims.
The analysis by Juniper Research suggests use of open banking for payments will grow by 2,800 per cent over the next five years from the current $4bn expected during 2021.
The research claims increased use will be driven by greater awareness and more use of application programming interfaces (APIs).
Juniper Research’s study even suggests that open banking payments taken directly from someone’s account could threaten the dominance of card use as there is a lower risk of fraud.
The analysis forecasts that Europe will account for more than 75 per cent of open banking payments in 2026 and said APIs should be used more for loans, credit cards and mortgage rather than just taking money from an account.
“The race is on for vendors to build the most compelling capabilities for the future of open finance,” Damla Sat, co-author of the research, said.
It comes after Funding Circle revealed in August that it is working on an API to embed its loan applications on other platforms.