The British government (HMG) is inviting payment firms to help it embed open banking into the GOV.UK Pay platform under a £49 million contract.
The tender comes as open banking users in the UK hit 11.7 million in January, with over 22.1 million open banking payments made monthly.
Open banking was introduced under the Second Payment Services Directive in 2018 and established data sharing principles that let third-party providers access previously closely guarded banking data.
Across the UK there are now some 1.7 billion open banking API calls per month. Simply, for a user, the addition of open banking to GOV.UK Pay will let users approve direct payments from their banking application rather than having to go through a third-party payment services provider.
The Government Digital Service said it is "seeking a payment service provider to underpin the… platform, specifically for processing credit and debit card payments and pay by bank (open banking) payments".
GOV.UK Pay currently uses Stripe for local authorities, police and government-owned charities. For central government, arm’s length bodies and NHS payments, it uses Government Banking's PSP, Worldpay.
In a February 19 market notice, GDS said that GOV.UK Pay lets over 1,000 government bodies take payments for their services digitally. It has processed over 94 million transactions since 2016, worth over £6 billion.
An example service user is the Passport office.
GDS said: “Whilst the current contract handles only 17% of payments currently going through GOV.UK Pay it is used by more than 70% of all our services currently taking a payment and is the only option available which enables teams to start taking payments within one working day…”
The tender, worth an estimated £49.2 million, is for an initial 36-month period from early July 2025 with the possibility for two yearly extensions.
It comes as the government looks to use the Data (Use and Access) Bill (currently in the Committee stage in the House of Commons) to support “open finance which encompasses a wider range of financial products and services, such as investments, insurance, and pensions, and beyond into other key economic sectors such as energy and telecoms...”
As Henk Van Hulle, CEO of OBL (the entity set up in the UK to deliver open banking) earlier noted: “This year will see the expansion of open banking into the next generation of open finance and data. The UK’s thought leadership on data usage and access puts us at the forefront of data and payments innovation globally. We will therefore have a keen eye on interoperability, as the industry looks to enable world class cross-border data sharing” – and now, even the government will be using it too.
