Top 5 Open Banking Third Party Providers for Payment Initiation [2025 Guide]

For UK businesses, handling payments is no longer just about debit or credit card rails. With the rise of Open Banking, firms now have the option to connect directly to customer bank accounts for faster, lower-cost, and more secure transactions. This shift is being driven by third party providers for payment initiation, which are authorised by the Financial Conduct Authority (FCA) to move money on behalf of customers.

Within this category, Payment Initiation Service Providers (PISPs) play a crucial role. They enable businesses to offer Pay by Bank at checkout, send batch payments for payroll, process instant refunds, and reduce reliance on traditional card schemes.

In this guide, we’ll look at the top Open Banking third party providers for payment initiation in the UK, explain what makes them different, and highlight the key factors you should consider when choosing the right provider for your business.

What Are Payment Initiation Service Providers (PISPs)?

Under the UK’s Open Banking framework, Payment Initiation Service Providers (PISPs) are a regulated type of third party provider (TPP) that can initiate payments directly from a customer’s bank account with their consent. Instead of relying on card networks, a PISP connects securely to a customer’s bank through APIs and moves money in real time.

How They Work

• A customer chooses Pay by Bank at checkout or during an online transaction.
• The PISP securely connects to the customer’s bank account.
• With Strong Customer Authentication (SCA), the payment is approved directly in the customer’s mobile banking app.
• The funds move instantly between accounts using the UK’s Faster Payments system.

Why It Matters

• For businesses: reduced transaction costs, faster settlement, fewer chargebacks.
• For customers: simple and secure payments without cards, PINs, or manual transfers.

Because PISPs must be FCA-authorised, businesses working with them gain the assurance of strict compliance, data protection, and regulated financial infrastructure.

Key Criteria for Choosing Third Party Providers for Payment Initiation

Not all third party providers offer the same coverage, features, or speed to market. When evaluating payment initiation service providers in the UK, here are the main factors businesses should consider:

1. Bank Coverage

Check what percentage of UK banks are supported. Leading providers offer access to major bank coverage, including both high-street and digital banks.

2. Deployment Speed

Time to market is critical. Some providers take months, while others can help you go live 2–3x faster with ready-to-deploy APIs and onboarding support.

3. Feature Set

Look beyond just Pay by Bank. Strong providers will also enable:

• Batch payments for payroll and suppliers
• Instant refunds for e-commerce
• QR code payments for retail
• Automated receipts for accounting systems

4. Pricing Model

Consider whether the provider uses a usage-based model (flexible for SMEs and scaling firms) or an enterprise contract (often suited for high-volume corporates).

5. White-Label & Developer Support

If you want to embed payments into your own platform, look for white-label APIs, detailed documentation, and responsive developer support.

Finexer

Finexer is one of the leading open banking third-party providers for payment initiation in the UK, built specifically for businesses that want to reduce card fees and move money faster. Unlike global-first platforms, Finexer focuses only on the UK market, giving businesses access to 99% of UK banks through one secure API.

What You Can Do with Finexer

• Pay by Bank at Checkout – let customers pay directly from their bank account in seconds.
• Batch Payments – process payroll or supplier transfers in one go, saving hours of admin.
• Instant Refunds – return money to customers immediately, reducing delays and support issues.
• QR Code Payments – collect in-person or remote payments without card machines.
• Automated Receipts – sync every transaction directly with your accounting system.
• White-Label APIs – integrate payments under your own brand for a seamless customer experience.

Why Businesses Choose Finexer

• 2–3x Faster Deployment – go live in weeks, not months.
• FCA Authorised – built on a regulated infrastructure with full compliance.
• Flexible Pricing – a usage-based model designed for SMEs and scaling businesses.
• UK-Only Coverage – focused on the local market, optimised for UK compliance and banks.
• Guided Onboarding – 3–5 weeks of hands-on support to make integration smooth.

For businesses that want a cost-effective and compliant alternative to card payments, Finexer stands out as the go-to provider. Whether you’re an accountant managing bulk payments, a retailer offering refunds, or a fintech embedding Pay by Bank, Finexer gives you the tools to handle payments with speed and confidence.

TrueLayer

TrueLayer is another well-known payment initiation service provider in the UK, offering both AIS (data) and PIS (payments) functionality. Its platform is often used by larger fintechs and enterprise platforms that need Pay by Bank as part of their digital offering.

Key Highlights

• Coverage across the UK and wider EU markets.
• Provides both account information and payment initiation APIs.
• Commonly integrated into fintech apps for payments and user onboarding.

While TrueLayer is established in the Open Banking space, it is generally chosen by firms with broader international or enterprise requirements.

Token.io

Token.io is a third party provider that focuses heavily on payment initiation APIs with a broader international reach. Alongside UK connectivity, it supports cross-border payments, which makes it a fit for businesses with multi-market operations.

Key Highlights

• Strong focus on payment initiation (PIS).
• Expanding coverage across Europe and beyond.
• Used by PSPs and platforms handling payments at scale.

Token.io is often chosen by businesses with international ambitions, though UK-only firms may prefer providers that specialise in local coverage.

Modulr

Modulr positions itself as an infrastructure provider, giving businesses direct access to UK payment schemes such as Faster Payments, Bacs, and CHAPS. While it supports payment initiation services, it is most often used by enterprises that need embedded accounts and scheme connectivity as part of their payment workflows.

Key Highlights

• Provides access to core UK payment rails.
• Focus on embedded accounts and enterprise use cases.
• Suited for firms needing large-scale infrastructure rather than lighter integrations.

Modulr is typically chosen by businesses that prioritise scheme access and embedded finance, rather than those seeking rapid Pay by Bank deployment.

Volt

Volt is a newer entrant in the Open Banking space but has quickly gained attention as a provider focused on Pay by Bank payments at scale. Unlike traditional third party providers for payment initiation that mainly offer connectivity, Volt positions itself as an orchestration layer, managing multiple bank connections and optimising transactions in real time.

Highlights

• Advanced payment orchestration tools for merchants.
• Expanding coverage across multiple global markets.
• Partnerships with PSPs and large merchants handling high transaction volumes.

Market Fit

Volt is often chosen by businesses that operate internationally or handle large-scale e-commerce payments, where orchestration and transaction routing are a priority. For smaller firms with a UK-only focus, it may be more than what’s required.

Real-World Use Cases of Payment Initiation Providers

Third party providers for payment initiation are reshaping how UK businesses move money. Instead of relying on card networks or slow manual bank transfers, Payment Initiation Service Providers (PISPs) allow businesses to connect directly with customer accounts through Open Banking. The result is faster transactions, lower costs, and greater control.

Here are some practical examples of how different sectors are using them in 2025:

Payroll & Supplier Payments

Finance teams at SMEs and mid-sized firms often face the challenge of paying dozens or even hundreds of employees and suppliers on time. With a batch payment initiation API, these transfers can be scheduled and sent in one go. This eliminates the need to log into multiple online banking portals and avoids costly bank charges for bulk transactions.

Example: An accounting firm managing payroll for multiple clients can initiate all payments directly through a PISP, reducing manual work and ensuring every transaction is logged with an FCA-compliant audit trail.

E-commerce Checkouts

Online retailers are adopting Pay by Bank as a secure checkout option. Customers simply select their bank, approve the payment in their mobile app, and funds are transferred instantly via Faster Payments. This avoids interchange fees and reduces the risk of chargebacks — a common issue with card transactions.

Example: A mid-sized retailer offering Pay by Bank alongside cards can save thousands in annual fees, while also improving conversion rates by making checkout faster for mobile shoppers.

Instant Refunds

Refunds processed through card networks can take 3–5 business days to reach the customer. With a payment initiation provider, refunds are credited instantly back to the customer’s account. This not only improves customer satisfaction but also lowers the volume of support tickets related to “refund delays.”

Example: A travel company can use PISPs to return deposits immediately when bookings are cancelled, boosting trust and brand reputation.

Professional & Service-Based Firms

Law firms, consultancies, and accounting practices often handle sensitive client money. Using a regulated third party provider for payment initiation ensures funds are transferred securely, with a clear audit trail that meets UK regulatory standards.

Example: A law firm managing property transactions can move funds between client accounts quickly while maintaining full compliance with SRA and FCA expectations.