Introduction
Pay by Bank, an innovative fintech solution, is revolutionizing tax payments in the UK by enabling secure and efficient account-to-account transactions. By leveraging open banking APIs and existing banking infrastructure, Pay by Bank reduces the need for taxpayers to manually enter sensitive financial details, lowering errors and improving transaction efficiency.
In the past year, taxpayers have increasingly adopted this payment method, with over £12 billion sent to HMRC using Pay by Bank between 1st February 2024 and 20th January 2025—a 36% increase from the previous year. These figures, provided by Ecospend, a Trustly company, demonstrate the growing trust and adoption of open banking solutions.
Read: Cross-Border Payments: Improving Access to Financial Services in Emerging Economies
Year-on-Year Growth in Pay by Bank Tax Payments
| Period | Number of Transactions | Total Value | Growth YoY |
| 1st Feb 2023 – 20th Jan 2024 | 2.8 million | £8.9 billion | – |
| 1st Feb 2024 – 20th Jan 2025 | 3.6 million | £12 billion | 28% (transactions), 36% (value) |
January, a crucial month for self-assessment tax payments, saw a sharp rise in adoption. In the first 20 days of January 2025, taxpayers used Pay by Bank for over 500,000 transactions, sending £1.7 billion to HMRC, a 39% increase from £1.2 billion in the same period last year.
The Rise of Pay by Bank in Tax Payments
With approximately 12 million UK taxpayers expected to submit self-assessment tax returns by 31st January 2025, the role of fintech in streamlining tax payments has never been more significant. Pay by Bank offers a seamless and secure alternative to traditional payment methods, minimizing payment errors, reducing costs, and enhancing operational efficiency for both taxpayers and HMRC.
Why This Matters for Fintech?
The increasing adoption of Pay by Bank highlights the transformative impact of fintech in government financial systems. Open banking solutions offer improved security, efficiency, and cost-effectiveness, setting a precedent for their integration into broader public sector services. HMRC’s adoption of Pay by Bank exemplifies how fintech innovations can enhance public service operations and establish global standards for digital payments.
Read latest fintech articles: The Rise of Neo-Banks: Transforming Financial Access in Emerging Markets
Industry Insights
Johan Tjärnberg, Group Chief Executive of Trustly, commented:
“It is fantastic to see the substantial increase in people using Pay by Bank. The technology is designed to make tax payments quicker and easier, reducing the chances of mistakes and cutting costs per transaction.
HMRC’s use of Pay by Bank is one of the most innovative examples of embedding fintech within a Government, setting a global standard. The tax authority is able to provide a simple, fast, and secure payment experience. We hope to see further adoption of Pay by Bank across other Government Departments to enhance payment efficiency and reduce public sector costs.”
Conclusion
The continued growth of Pay by Bank demonstrates the increasing confidence in fintech-driven payment solutions. With HMRC extending its partnership with Trustly’s Ecospend, this technology is expected to further streamline tax payments, reduce errors, and improve efficiency. As fintech adoption accelerates, the success of Pay by Bank in tax payments may pave the way for broader integration across public sector financial services.
Read latest fintech articles:Fintech for Women’s Financial Empowerment
Read latest fintech articles:The Future of Digital Wallets and Payment Systems for the Unbanked
Read: Fintech in Hospitality: Top 10 Fintech Solutions for Hotels
To participate in our interviews, please write to us at news@intentamplify.com
