Open banking rollout stalls in US as UK expands Pay by Bank services

Open banking’s biggest U.S. deadline slipped on April 1 2026 after a federal judge froze the CFP Bureau’s Section 1033 rule, while in the UK the open‑API ecosystem continues to grow, powering “Pay by Bank” options at retailers such as Amazon and e‑Bay【1】.

Regulatory limbo in the United States

The Consumer Financial Protection Bureau’s Section 1033 rule, finalized in late 2024, mandated that banks holding more than $250 billion in assets provide dedicated developer interfaces for data sharing by April 1 2026. A federal judge enjoined the rule after banking groups sued, leaving the deadline in legal limbo and halting mandatory compliance【2】. Without a final rule, banks are split: some press ahead with API partnerships—most notably with data aggregators like Plaid—to meet consumer demand and replace insecure screen‑scraping, while others pause their open‑finance projects until the CFPB issues new guidance【2】. Industry observers expect a fresh rulemaking process to begin in the coming weeks, but the timeline and content remain uncertain【2】.

UK market pushes ahead with Pay by Bank

In contrast, the UK’s open‑banking framework, required since 2018, has seen major banks publish open APIs that enable “Pay by Bank” payments directly from consumer accounts. Retail giants including Amazon, Booking.com, e‑Bay, JustEat and Ryanair now accept these bank‑initiated transfers, often labelled “pay with my bank account” or “online bank transfer”【1】. The system relies on authorised third‑party providers listed in the Open Banking Directory and the FCA’s Financial Services Register, giving consumers a clear way to verify that firms are regulated before granting data access【1】. Users grant consent through their bank’s official app, keeping login credentials private and allowing them to revoke permissions at any time【1】.

Consumer safeguards and the shift from screen‑scraping

Both regions emphasise security. In the UK, API‑based data sharing is considered safer than the older screen‑scraping method, which required third‑party apps to collect users’ login details—a practice being phased out【1】. The FCA and Open Banking Directory provide searchable registries to confirm a provider’s authorisation, and banks must display an “authorisation dashboard” where customers can review and withdraw consent instantly【1】. These safeguards aim to curb scams that mimic Pay by Bank interfaces to steal credentials【1】.

What to watch

• U.S. regulatory update: Anticipate a CFPB announcement on a new Section 1033 rulemaking in the next few weeks【2】.
• UK consumer adoption metrics: Track the volume of Pay by Bank transactions reported by major retailers, which will indicate how quickly the service is gaining market share.
• Bank‑API partnerships: Monitor announcements from large U.S. banks on API collaborations with aggregators like Plaid, as they signal industry momentum despite the regulatory pause【2】.

The divergent paths underscore a broader question: will the United States eventually align its open‑banking rollout with the UK’s market‑driven approach, or will prolonged regulatory uncertainty reshape the pace of innovation and consumer protection in the sector?