Open Banking for Rent Collection: The Future for UK Landlords

Open Banking is transforming how UK landlords collect rent. Instead of relying on standing orders that tenants can cancel without notice, or direct debits that take three days to clear and cost money per transaction, Open Banking enables instant, free, bank-to-bank payments that are initiated through a secure link and confirmed in real time.

For landlords, this means faster access to funds, automatic reconciliation, and complete visibility over payment status. For tenants, it means a simple, one-click payment experience that is more secure than sharing bank details. Since Open Banking was mandated by the Competition and Markets Authority in 2018, adoption has grown steadily, and in 2026 it is reaching a tipping point for the rental market.

This guide explains exactly how Open Banking works for rent collection, how it compares to traditional methods, which platforms support it, and how to set it up for your portfolio. If you are still relying on standing orders and manual bank checks, this is the upgrade you have been waiting for.

What Is Open Banking?

Open Banking is a UK regulatory framework that requires banks to share customer data (with consent) and enable third-party providers to initiate payments through secure APIs. It was mandated by the Competition and Markets Authority (CMA) in 2018 and is regulated by the Financial Conduct Authority (FCA).

In practical terms, Open Banking allows authorised third-party apps to connect to your bank account (with your explicit permission) to read transaction data and initiate payments. For rent collection, this means a tenant can pay their rent by clicking a link, authenticating in their banking app, and confirming the payment — which then arrives in the landlord's account within seconds.

How Open Banking Rent Payments Work

The process is straightforward from both the landlord's and tenant's perspective. Here is the typical flow when using a platform like Latch that has Open Banking built in.

1. Payment request created: Latch generates a unique payment link for the tenant, pre-filled with the correct amount and your bank account details. This happens automatically on the rent due date.
2. Tenant receives the link: The payment link is sent via email, SMS, or displayed in the tenant portal. The tenant clicks it on their phone or computer.
3. Bank selection: The tenant selects their bank from a list of supported UK banks (virtually all major banks are supported).
4. Authentication: The tenant is redirected to their own banking app to authenticate the payment using their usual security — fingerprint, Face ID, or banking PIN.
5. Payment confirmation: The tenant confirms the payment amount and recipient. The bank processes the transfer.
6. Instant settlement: The money arrives in the landlord's bank account within seconds. Latch confirms receipt and marks the rent as paid.
7. Automatic reconciliation: Because the payment was initiated through Latch, it is automatically matched to the correct tenant and lease. No manual matching required.

Open Banking vs Standing Orders vs Direct Debit

Benefits for Landlords

Benefits for Tenants

Open Banking is not just better for landlords — tenants benefit too. This matters because tenant adoption is essential for the system to work.

• Simpler than setting up a standing order: No need to enter sort codes, account numbers, or remember payment references. Just click a link and confirm in your banking app.
• More secure: No bank details are shared with the landlord or any third party. Authentication happens entirely within the tenant's own banking app.
• Proof of payment: Instant confirmation provides clear evidence that rent was paid, which can be useful for disputes or building a rental payment history.
• No risk of overpayment: Each payment is for the exact amount due. Unlike standing orders, there is no risk of the old amount being paid after a rent increase.
• Works with any bank: Open Banking is supported by virtually every UK bank and building society.

Which Platforms Support Open Banking for Rent?

Not all property management platforms have integrated Open Banking. Here is the current landscape for UK landlords in 2026.

Latch is currently the only UK landlord platform that combines Open Banking payments, Open Banking bank feeds, automatic reconciliation, and AI rent chasing in a single integrated system. This end-to-end approach means the entire rent collection lifecycle — from payment initiation to financial recording — is fully automated.

Setting Up Open Banking Rent Collection

If you use Latch, setting up Open Banking rent collection takes less than 15 minutes.

1. Connect your bank: In the Latch dashboard, go to Settings and connect your property bank account via Open Banking. This is a read-only connection that lets Latch monitor incoming payments.
2. Add your tenants and leases: Ensure each tenant has a lease record with the correct rent amount and due date.
3. Enable payment links: Toggle on Open Banking payment links in your rent collection settings. Latch generates a unique, secure link for each tenant.
4. Notify your tenants: Send your tenants their payment link. You can do this via Latch's built-in messaging, or copy the link into your own email.
5. Configure reminders: Set up automatic payment reminders to be sent before each due date, with the payment link included.
6. Enable AI chasing: Optionally, enable AI rent chasing to automatically follow up with tenants who have not paid by the grace period.

Open Banking Security: Addressing Concerns

Some landlords and tenants have concerns about Open Banking security. These concerns are understandable but largely unfounded when using FCA-authorised providers.

• FCA regulation: All Open Banking providers must be authorised by the FCA. They undergo rigorous security assessments and are subject to ongoing regulatory oversight.
• No credential sharing: Neither the landlord nor the platform ever sees the tenant's banking login credentials. Authentication happens directly between the tenant and their bank.
• Strong Customer Authentication (SCA): Every Open Banking payment requires SCA — typically biometric authentication (fingerprint or face) plus the banking app. This is more secure than typing card details into a website.
• Read-only access: When a landlord connects their bank for monitoring, the connection is read-only. The platform cannot move money from your account.
• Consent-based: Every connection and every payment requires explicit consent. Consent can be revoked at any time through the bank's app.

Variable Rent and Arrears Payments

One advantage of Open Banking over standing orders is handling variable amounts. If a tenant is paying off arrears, or if the rent changes following a Section 13 notice, Open Banking payment links can be updated to reflect the exact amount due — including any partial payments or additional charges.

Latch automatically adjusts the payment link amount when there are outstanding arrears. If a tenant owes £950 for current rent plus £200 in arrears, the link reflects the total £1,150. Once the arrears are cleared, the link reverts to the standard rent amount. This removes the back-and-forth communication about how much to pay.

The Future of Open Banking in Property

Open Banking is still evolving. Variable Recurring Payments (VRP), which allow pre-authorised recurring payments within set limits, are expected to become widely available for rent collection by 2027. This would combine the convenience of standing orders with the benefits of Open Banking — the tenant authorises a maximum monthly amount, and the platform sweeps the exact rent automatically on the due date.

Latch is already preparing for VRP integration. When available, this will mean tenants authorise rent payment once, and the correct amount is collected automatically each month — with instant settlement, zero fees, and full automatic reconciliation.