For years, expanding the features of Pay by Bank, to support recurring payments to businesses  has been one of the most talked-about opportunities in payments. There’s been a lot of discussion, but little to show for it. Until now.

The path to Bank on File 

For anyone who was there in 2018, open banking seemed to happen in a big bang bang 💥. Overnight, the law changed and all banks and account providers were required to provide APIs to support what we now call Pay by Bank. 

Pay by Bank has been growing ever since - now at 36 million transactions per month and appearing on more and more checkouts - From Revolut to Ryanair. 

But there has been something holding it back. Banks have not been required to support recurring payments to businesses. 

This has limited what Pay by Bank can do. It can enable one-off payments across ecommerce, financial services, igaming and even recurring payments between a customer’s own accounts (sweeping). But it can’t support subscriptions, bill payments or 1-click checkout. 

Decoding the jargon

Partnership not regulation

Over the last couple of years, banks and fintechs have been working hard behind the scenes to address this gap. 

Instead of calling for more regulation, the industry has come together to create a commercial framework for recurring payments (something we have long supported). The idea being to incentivise, rather than require, banks to support new features, by paying banks for their part in every payment. 

This has been a success. The framework has been created and UK Payments Initiative Limited has been established to put it into action. 

Three steps to go-live

As of March 2026, we are tantalisingly close to making Bank on File a reality through our participation in the UK Payments Initiative. There are three milestones: 

• Testing (underway) - this is where banks and fintechs carry out testing to make sure Bank on File works as expected. This stage is well underway. 

• Subscription (due May) - for UKPI to officially launch as a scheme, the participating banks and fintechs need to purchase shares in UKPI - which will be an important component of funding its initial operations. If all goes to plan, this should happen in May 

• Launch (coming very soon) - once the above steps are complete, fintechs like TrueLayer will be able to offer Bank on File to businesses in the Wave 1 cohort. 

The waves 🌊

Part of the agreement for how to introduce this new Pay by Bank feature through the new scheme, was that it would roll-out in waves. This means that bank on file will be initially available to a specific set of businesses:

Wave 1:

Utilities: 

• Energy: Electricity and Gas providers regulated by Ofgem.

• Water: Water providers regulated by Ofwat.

• Telecoms: Ofcom-regulated providers for broadband, fixed lines, and mobile contracts.

Rail: 

Train companies under the National Rail Conditions of Travel (for ticket payments).

Regulated Financial Services:

• Firms offering products eligible for Financial Services Compensation Scheme (FSCS) protection.

• Mortgage Providers: Regulated by the FCA.

• Pensions: Master trust schemes authorized by The Pensions Regulator.

Government (Central & Local):

• UK Government departments, local authorities, and public bodies (e.g. council tax).

Charities:

Registered and regulated UK charities.

Wave 2:

Everything else

Once UKPI has launched Wave 1, work will get underway to develop Bank on File so it meets the needs of other businesses and their customers. A lot of thinking has already been done by industry on both the framework and commercial model for Wave 2.

Why this moment matters

Bank on file is the next step in the evolution of Pay by Bank.

For consumers, it provides a way to set up recurring or repeat payments directly from a bank account, with clear consent and more control. This means they get the modern, one-click payment experience they expect on top of the fast and secure benefits of Pay by Bank. For businesses, it offers an alternative to cards-on-file and legacy recurring payment rails, with faster settlement, lower costs and fewer failed payments.

This is the opportunity that has driven the conversation for years. Sweeping showed what recurring bank payments could do between accounts owned by the same user. Bank on file completes the picture for Pay by Bank, levelling the playing field with other payment types. 

The next few weeks matter. The industry is now firmly in execution mode, where operational readiness, live journeys and ecosystem coordination take priority.

What happens next

For merchants, that means identifying where Bank on File can deliver the most value, whether improving the consumer experience, reducing failed payments, or enhancing payment security.

For banks and fintechs, the focus is on reliability, consistency and operational control ahead of scale.

At TrueLayer, we’re thrilled to have reached a point, through industry partnership, where we can fully close the functionality gap between Pay by Bank and other payment methods.  We’re ready for take-off.

If you’re exploring how Bank on file could support subscriptions, repeat purchases or recurring billing, get in touch with our team.