The Open Banking Challenge Series: Ensuring Payment Certainty in Open Banking

Explore the crucial challenge of payment certainty. Discover how a scheme-level change in Open Banking Payments can bridge the confidence gap and usher in a unified payment ecosystem.

Ensuring Payment Certainty in Open Banking

In my previous article, I briefly touched on the reasons why merchants are hesitant to embrace Open Banking Payments. In this article, we will isolate and dive deeper into each obstacle.

The first reason why merchants are hesitant to embrace Open Banking payments is the lack of guaranteed payment confirmation, which has deterred titans of industries from fully embracing this transformative payment method. 

The Quest for Certainty

In the world of payments, certainty is paramount. When a merchant accepts payment, whether for a bus pass or a high-value purchase, they seek assurance that the transaction is successfully completed. Traditional card schemes offer merchants an “approval code” that serves as an unequivocal confirmation of payment authorization as long as the appropriate technology has been used (e.g. Chip and PIN). 

This code provides the merchant with immediate certainty, allowing them to proceed with confidence, safe in the knowledge that the funds are on their way.

The Missing Link in Open Banking Payments

The absence of a comparable mechanism in Open Banking Payments has cast a shadow of doubt over its viability for many merchants. While customers may approve the transfer of funds and the bank accepts they will move the money, there exists no equivalent confirmation code to signal to the merchant that the payment has been authorised and the money is on its way from a liability perspective. 

This leaves merchants in a state of uncertainty, compelled to rely solely on the credit hitting their bank accounts before confirming a successful transaction.

The Scheme-Level Solution

To address this crucial issue and boost merchant confidence in Open Banking Payments, a scheme-level change is warranted. Imagine a scenario where, upon bank approval of a Payment Initiation Service Provider (PISP) request, merchants receive an unambiguous “confirmation code.” This code would serve as a virtual handshake between the bank and the merchant, assuring the latter that the funds are indeed on their way.

This seemingly straightforward adjustment holds the potential to transform the Open Banking landscape. It provides merchants with the immediate certainty they seek, mirroring the experience offered by established card schemes. With this confirmation code in hand, merchants can seamlessly process orders, fulfil services, or release products without the hesitation that currently plagues Open Banking Payments.

Benefits Beyond Certainty

Beyond instilling payment certainty, this scheme-level change can have cascading effects on the broader adoption of Open Banking Payments. Merchants, particularly the titans of their industries, could find themselves more inclined to explore this payment method, attracted by the reliability and efficiency of a guaranteed payment confirmation.

Such a change could contribute to reducing the perception gap between Open Banking and traditional card payments. As merchants experience the same level of confidence and assurance with Open Banking Payments as they do with cards, the lines between the two methods could blur, driving the industry toward a more unified payment ecosystem.


The concept of guaranteed payment confirmation represents a pivotal juncture in the evolution of Open Banking Payments. By implementing a scheme-level change that provides merchants with a confirmation code upon bank approval, we can reshape the landscape, boosting confidence, fostering adoption, and paving the way for a future where Open Banking Payments are as trusted and seamless as their traditional counterparts. 

In my next piece, I will address the issue of the complex refund process surrounding Open Banking. Currently, there is no easy way of performing large amounts of refunds without consent from the merchant account or the customer. 

I will dive deeper into this issue and the potential solutions that could be implemented to solve the problem. 

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