Open banking has shifted from a regulatory curiosity into a practical payments channel that smaller iGaming operators can deploy today. With direct account-to-account transfers, reduced interchange costs and near-instant settlement, it levels ground that card networks and e-wallets previously tilted toward larger platforms with greater negotiating power.
What Open Banking Actually Means for Gambling Payments
Open banking uses regulated APIs, built on frameworks such as PSD2 in the European Economic Area and the UK's Open Banking Standard, to let players authorise payments directly from their bank accounts. No card network sits in the middle, no e-wallet provider takes a margin. The transaction moves from the player's bank to the operator's bank in seconds, confirmed in real time.
For operators, this changes three things immediately: cost per transaction falls because interchange fees disappear, settlement can happen same-day rather than T+2 or T+3, and the payment itself carries verified account data that feeds directly into responsible gambling and AML workflows.
Where Large Operators Currently Have the Advantage
Tier-one platforms have used their volume to negotiate bespoke acquiring agreements, integrate proprietary bank connectors and absorb the technical costs of building robust payment orchestration layers. A smaller operator relying on a single payment service provider (PSP) and standard card rails is typically paying more per transaction and waiting longer for funds to clear. That margin difference compounds quickly at scale.
Open banking disrupts this dynamic because the cost advantage of large operators is primarily structural, not technical. When the structure changes, smaller operators can access comparable economics.
Practical Steps for Small Operators
1. Choose a Gambling-Aware Open Banking Aggregator
Not all open banking aggregators serve the gambling vertical. Operators should prioritise providers that hold the correct licences in their target jurisdictions, have existing bank coverage above 80 percent for their player base's primary banks, and offer explicit support for gambling merchant category codes. In the UK, providers such as Volt, Token.io and Yapily have established gambling-specific onboarding tracks. In the Netherlands, Bunq and ING's API coverage through certified third-party providers is maturing.
2. Use Payment Data to Strengthen AML Controls
Each open banking transaction carries verified account holder data. The paying account name, sort code and account number arrive with the payment rather than being self-declared by the player. Compliance teams can use this to automate source-of-funds verification at deposit, cross-reference against player registration data and flag mismatches without manual intervention. For operators under MLRO scrutiny, this is a material improvement over card payments where the beneficial owner is often obscured.
3. Offer Variable Recurring Payments for Retention
Variable Recurring Payments (VRPs), currently live in the UK and expanding under the EU Payment Services Regulation 3 timeline, allow operators to initiate follow-on payments within parameters a player has pre-authorised. For subscription-style bonus programmes or loyalty top-ups, this creates a smoother deposit journey without requiring the player to re-authenticate every transaction. Larger operators have explored VRPs; smaller operators that implement them now gain a competitive differentiator in the UK market ahead of broader adoption.
4. Build Instant Withdrawal as a Retention Feature
Withdrawal speed is consistently cited in player surveys as a primary reason for switching platforms. Open banking withdrawals can settle to a player's account within minutes via Faster Payments in the UK or SEPA Instant in the eurozone. Small operators that promote verified, near-instant withdrawals convert this operational capability into a marketing message that larger incumbents, often burdened by legacy finance systems, cannot always match credibly.
Cost and Integration Realities
Integration effort varies by platform. Operators on modern headless or API-first casino back-ends can connect an open banking aggregator in two to four weeks with a small development team. Operators on older proprietary platforms may need six to twelve weeks and a middleware layer. The fixed cost of integration is typically recovered within three months if open banking displaces even 20 percent of card transaction volume, given the fee differential.
From our work with mid-market operators across the UK, Netherlands and Germany, open banking consistently reduces blended payment costs by 30 to 50 percent on the transactions it covers. The compliance data it generates also reduces manual review workload, which is a real operational saving for teams without large AML departments.
Risks to Manage
- Bank coverage gaps: not every player's bank supports open banking yet; always maintain card and e-wallet fallback options.
- Chargebacks do not apply: open banking payments are push transactions, meaning dispute resolution is handled bilaterally, not through a card scheme. Clear terms and a responsive support process are essential.
- Regulatory classification: some jurisdictions do not yet recognise open banking payments for gambling self-exclusion blocking at the bank level; operators must not assume the bank will enforce deposit limits automatically.
- SCA fatigue: players must authenticate each payment with their bank app; if that journey is clunky, conversion drops. Test the end-to-end UX on multiple devices before launch.
The Competitive Window Is Now
Open banking adoption in gambling is still early enough that a well-executed rollout gives a smaller operator a genuine edge. The cost savings are real, the compliance benefits are measurable and the player experience can exceed what card payments deliver. Operators that move in the second half of 2025 will be positioned ahead of the next wave of regulatory pressure on card gambling payments, which continues to build across multiple European markets.
