Is open banking safe? When open banking payments make sense

• Open banking payments let customers pay directly from their bank account through a checkout-led flow, with approval handled inside their banking app or online banking.

• When delivered through regulated providers, secure APIs and bank-level authentication, open banking can be a safe payment option, but it still needs the right operational controls behind it.

• Customer hesitation and unfamiliar checkout flows can affect adoption, even when the technology itself is working as intended.

• Open banking can be useful for high-value payments, account-based relationships and journeys where card entry adds friction, but it works best as another payment option rather than a replacement for cards.

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A customer gets to checkout, and instead of reaching for a card, they're offered a new option: pay directly from their bank. No card number, no CVV, just a redirect to their banking app and a tap to confirm. 

For a lot of shoppers, that moment still comes with a flicker of hesitation. Is this the same as a bank transfer? Am I handing over my banking information to a stranger? Should I trust it?

That hesitation isn't unreasonable. Open banking payments are still new enough that most people have a rough idea what they are, without quite knowing how they actually work. So this piece sets out to answer two questions properly: what are open banking payments, and is open banking safe enough to sit confidently in a checkout flow. 

Strip away the terminology and open banking payments are fairly simple. They let a customer pay a merchant directly from their bank account, rather than routing the payment through a card scheme. In practice, that usually means the customer is taken to their own banking app, or their bank's online banking page, to approve the payment themselves.

The goal is to introduce new payment capabilities without creating another integration that becomes difficult to change later.

It helps to be clear about what open banking isn't, because it gets lumped in with both cards and transfers, and it behaves like neither.

Open banking vs card payments

Card payments run on a chain of card networks, issuers and acquirers, all built around a 16‑digit number, an expiration date and a CVV. Open banking skips that chain entirely - there's no card number to enter, no expiration to remember, and no CVV to type in a rush. The fraud profile looks different too, since the payment is authenticated at the bank rather than validated against stored card data, and the chargeback mechanics used in card payments work differently in an open banking flow.

Open banking vs traditional bank transfers

This is the comparison that trips people up most. A traditional bank transfer usually means leaving the checkout, opening a separate banking app, copying across account details and adding a reference number, then waiting for the merchant to match it up on their end. It's manual, slow, and easy to get wrong.

Open banking payments are initiated from checkout itself. The customer is guided through their own bank's authentication, the payment can be confirmed in real time, and the merchant gets clean, structured payment data back rather than a reference number they have to reconcile by hand.

This is the question that matters most, and the answer is yes, open banking payments can be safe - provided they're delivered through regulated providers, secure APIs and reliable bank-level authentication. That doesn’t remove every risk, and businesses still need to understand how the wider payment flow is managed rather than assuming everything is handled automatically.

A few factors help make open banking a secure payment option:

None of this makes open banking bulletproof - no payment method is. The important point is that it operates through a regulated framework with established controls in place. 

A lot of the uncertainty around open banking comes from a few common misunderstandings.

• "Open banking gives the retailer access to my whole bank account." Not true - access is limited to the specific payment the customer has authorized, nothing more.
• "It's basically the same as a normal bank transfer." Not quite - the customer experience, authentication process, and way the payment moves through the system work differently.
• "There are no fraud risks at all." That’s overstating it - open banking can reduce certain risks, but it doesn’t remove the need for strong security practices.
• "Every customer will want to use it." Not yet - familiarity with open banking payments still varies a lot between customers.

The bigger challenges usually come from the checkout experience rather than the technology itself. If customers aren't expecting to approve a payment through their banking app, that extra step can feel unfamiliar - and some may leave the checkout even though everything is working exactly as it should.

There's the operational side too. Businesses need to think about what happens after the payment. Refunds, reconciliation, and customer support don't disappear with open banking, and customers should understand what they're agreeing to when they authorize a payment. 

The technology behind open banking is important, but so is making the payment experience feel simple and familiar. 

Open banking isn't a universal replacement for cards - and it doesn't need to be. It tends to make the most sense where customers already have a relationship with the business, or where paying directly from their bank account creates a simpler experience.

A simple way to think about it: open banking tends to earn its place where payments are higher value, recurring, or account-based - and where the customer's trust in the business is already established. The more impulse-led the purchase, the more likely cards remain the natural default.

Open banking won’t always be the right fit. When customers value speed, are used to a saved card, or want to use rewards or cashback linked to their card, a saved card can still offer the smoother checkout experience customers expect.

Open banking can give merchants and ISVs more flexibility in how they support payments, particularly where traditional card payments aren’t always the best fit. The potential benefits include:

For ISVs, open banking is best considered as part of the overall product experience rather than a separate add-on. It becomes another payment option within the checkout - as long as it integrates cleanly with the wider payment setup already in place. 

Open banking can remove friction from parts of the payment process, but it doesn’t mean everything runs itself once it’s switched on.

Refund handling still needs a clear process, and customer support needs to know how to handle delayed or failed payments in a way that still reconciles cleanly with the merchant’s existing setup. Providers still need proper due diligence before being added to the mix, while customers need clear information about consent and how their data is being used. And the whole flow still needs UX testing and ongoing compliance attention.

Open banking can make parts of the payment stack more efficient, but it still needs the right ownership, processes, and infrastructure behind it.

Open banking shouldn’t become another isolated payment integration sitting separately from the rest of the payments stack.

As more providers enter the market, the best option will depend on where and how payments are being taken. One A2A provider might offer better coverage in one region, while another could offer better performance or more suitable commercial terms elsewhere. 

Over time, that means swapping providers in and out, or running several at once, without the wider payment experience needing to be rebuilt each time - but that's only workable if the payment stack isn't tied to any one of them.

If those connections are hardwired into the payment stack, even a simple provider change can become a major technical task.

Aevi’s vendor-agnostic orchestration platform helps keep that flexibility in place. It gives PSPs, ISVs, and payment providers the ability to add open banking as another tender type alongside cards, wallets, and local payment methods, without tying the wider payment experience to a single provider. 

So, is open banking safe? Yes - provided it’s delivered through the right infrastructure, with regulated providers, secure APIs, and reliable bank authentication supporting the payment journey.

Aevi helps ISVs and payment providers add open banking alongside other payment methods through a flexible payment orchestration platform, without tying their payment experience to a single provider. 

If you’re looking to add open banking payments without creating another locked-in integration, get in touch with our team to see how our flexible payment platform can help you keep control as your payment needs grow.