Open Banking Refunds Market Projected to Hit $9.7 billion by 2033

According to Research Intelo, the Global Open Banking Refunds market size was valued at $2.1 billion in 2024 and is projected to reach $9.7 billion by 2033, expanding at a CAGR of 18.2% during the forecast period of 2025–2033. The primary factor fueling this robust growth is the increasing demand for instant, secure, and transparent refund mechanisms across digital payment ecosystems.

As consumer expectations shift towards real-time financial services and regulatory frameworks evolve to support open banking, businesses and financial institutions worldwide are accelerating their adoption of open banking refund solutions to enhance customer experience, minimize fraud, and streamline operational processes. This transition is further amplified by the proliferation of API-driven platforms, which enable seamless integration across diverse payment channels and foster interoperability among banks, fintechs, and merchants.

Open banking is remaking how payments move and refunds are one of the clearest examples. Rather than a slow card reversal or a manual bank transfer, open-banking refunds use account-to-account rails and payment-initiation APIs to send money back quickly and (potentially) instantly. That shift creates a distinct market: platforms, orchestration layers and banks building refund flows, payout products, fraud/verification controls and reconciliation tooling. This article explains how the market works, why it’s growing, key players and the main challenges ahead.

Demand drivers

1. Consumer expectations and experience

Customers increasingly expect refunds to be fast, transparent and under their control. Open banking enables near-real-time refunds with clear status updates a competitive advantage for merchants focused on retention.

2. Merchant cost and reconciliation benefits

Chargebacks are expensive and resource-intensive. Direct account refunds cut dispute resolution overhead, reduce fraud exposure, and simplify reconciliation by linking refunds to authenticated account identifiers.

3. Regulatory and payments landscape

Regulations that promote data portability and competition (like PSD2 in Europe) have created the API and consent architecture that open banking refunds rely on. Even in non-PSD2 markets, similar open banking initiatives and faster payments schemes are creating fertile ground.

4. Technology and product features

Platforms in this market typically combine: secure customer authentication (OAuth / OpenID Connect style consent), API orchestration to support multiple bank partners, transaction matching and reconciliation engines, fraud detection and rules engines, and merchant dashboards or plug-ins (for e-commerce platforms and POS systems). Emerging features include automated dispute triage, smart routing (choosing the fastest/cheapest refund rail), and pre-authorized refund windows tied to purchase flows.

Challenges and friction points

1. Bank participation and API fragmentation

Not all banks expose consistent refund-capable endpoints; fragmentation increases integration complexity and slows rollouts across regions.

2. Consent and UX complexity

Soliciting and managing customer consent in a frictionless way is tricky poor UX can negate the speed advantages. Safe, clear consent flows and good developer tooling are essential.

3. Fraud and liability allocation

Faster refunds can be abused if merchant-side fraud controls are weak. Clear liability rules between merchants, platforms and banks are necessary, along with strong anti-fraud measures.

4. Legacy systems and reconciliation gaps

Many merchants’ back-office systems are built around card rails and chargeback workflows; migrating to account-based refunds requires investment and process reengineering.

Future outlook

Over the next 3–5 years, expect wider merchant adoption as integration tooling improves and banks expand API coverage. Automation and AI will play larger roles in refund routing, fraud detection and dispute resolution.

Standardization efforts (industry APIs and message formats) would greatly accelerate scale and reduce costs. Ultimately, refunds could evolve from a painful afterthought to a proactive component of the purchase lifecycle refunds issued instantly at the point of return, with analytics feeding product and service improvements.

Competitive Landscape

Prominent companies operating in the market are:

• io
• TrueLayer
• Tink
• Plaid
• GoCardless
• Trustly
• Yapily
• Banked
• Worldline
• Finastra
• FIS (Fidelity National Information Services)
• Fiserv