Ask any payments lead at a UK gambling operator what keeps them up at night and you'll hear the same list. Deposits get declined for no clear reason. Withdrawals take days, and players complain loudly. Chargebacks eat into margin. Affordability checks keep getting stricter. Card rails were never designed for this industry, and they show it.
Open Banking was. More precisely, it was designed for any business that wants to move money straight between bank accounts, with strong authentication built in and no card network in the middle. For iGaming, that design fits the problems unusually well.
A quick refresher: how Pay by Bank works
Open Banking lets regulated providers, known as Payment Initiation Service Providers (PISPs), start a payment from a customer's bank account with their explicit consent. In the UK, it runs on standardised APIs that the largest banks were required to build, and payments settle over Faster Payments.
For a player, the deposit flow is simple. They choose "Pay by Bank" at the cashier and pick their bank. They approve the payment in their banking app with Face ID or a fingerprint, and they're sent back to the site with funds credited. They never type a card number. The operator never sees or stores bank login details. Every payment is authenticated by the player's own bank.
Why operators are moving deposits to Open Banking
Fewer declines. Card payments to gambling merchants carry high-risk merchant codes, and issuers treat them with suspicion. With Pay by Bank, the player authorises the payment inside their own banking app, so there's no guesswork at the issuer level. Payments either go through with the player's approval, or the player sees exactly why they didn't.
No card chargebacks. Account-to-account payments don't use the card scheme dispute process. That removes the "friendly fraud" chargebacks that hit gambling merchants hard, along with the fees, the admin and the risk to your scheme standing.
Lower cost per transaction. Taking the card networks out of the flow typically means lower fees than high-risk card processing. At iGaming volumes, the difference adds up fast.
A cleaner fit with UK rules. Credit cards have been banned for gambling in Great Britain since April 2020. Pay by Bank draws only on the player's current account, so every deposit is funded from their own money by design.
Withdrawals: where players actually decide whether to stay
Operators have spent years competing on welcome bonuses. Players have noticed that the real test comes later: how fast can I get my winnings out?
Open Banking helps here in two ways. First, a deposit made by Pay by Bank comes from a known, verified bank account, the one the player authenticated in their own app. That gives you a strong basis for a closed-loop policy: pay winnings back to the same account the money came from. Closed-loop payouts shut down a common route for money laundering and account takeover, where a fraudster deposits with one account and withdraws to another.
Second, payouts can go out over Faster Payments, which usually arrive in seconds rather than days. Paired with bulk payout tools, your finance team can process withdrawals in batches without the manual work of old-style bank transfers.
Smarter, less intrusive checks
The UK market is moving firmly towards financial risk and affordability checks. The hard part is doing them without driving away players who are gambling well within their means.
Account Information Services (AIS) give you another option. With the player's explicit consent, you can view verified account data to help with source-of-funds and affordability assessments. Players connect their bank in a couple of taps instead of uploading payslips and bank statements, and you get data straight from the bank rather than a PDF that could have been edited. It won't replace your wider safer gambling framework, but it can make checks faster, more accurate and less of a hassle for the player.
Two points are worth stating plainly. Consent is central: players choose whether to share their data and can withdraw that consent. And many UK banks let customers switch on gambling blocks, which generally apply to Open Banking payments as well as cards. That's a good thing. It means Pay by Bank works alongside the protections players have set up for themselves, not around them.
What to look for in an Open Banking provider
Not every provider will take on gambling merchants, and not every one that does understands the sector. Before you integrate, ask:
Is the provider FCA-authorised to provide payment initiation and account information services in its own right, or is it relying on someone else's licence?
Does it underwrite gambling merchants directly, and does it understand UKGC licence conditions and your AML/CTF obligations?
How good is its bank coverage, and what are its real conversion rates across the major UK banks?
Can it handle payouts as well as deposits, so you're not stitching together separate providers?
How quickly can it onboard you, and who do you speak to when something goes wrong?
The direction of travel
Card payments won't disappear from gambling cashiers overnight, and some players will keep using them. But the case for Pay by Bank as a default option is getting stronger every year. It brings fewer declines, no chargebacks, lower costs, faster payouts and checks that are grounded in real bank data. Operators who get the player journey right now will be the ones players trust with their money later.
How Fena can help
Fena Labs Ltd is an FCA-authorised payment institution (FRN 934835) offering Open Banking payment initiation and account information services. Our team has spent six years building Open Banking payments in the UK and has hands-on experience with merchant risk underwriting and AML/CTF in higher-risk sectors.
Article by
Gosia Furmanik
CEO and Founder
Published on
