Open Banking Explained, and 26 Other Money App Terms

Most glossaries of money app jargon are copies of each other, and a good number of them are now wrong. They still say FSCS protection is £85,000. It has not been £85,000 since 1 December 2025. They still describe Revolut as an e-money firm, when it stopped being one in March 2026, although not for every customer at once. So here is open banking explained properly, along with the 26 other terms that decide whether your money is protected, how much interest you actually keep, and what an app is allowed to do on your behalf.

Every figure below was checked against the regulator, the scheme or the firm itself, not against another glossary.

Open banking, in one paragraph and then in detail

Open banking is a legal right to make your bank hand your own current account data to a company you choose, and to let that company start a payment from your account, without you giving it your banking password. It is built on regulated software connections rather than screen scraping. The connection runs on the bank’s terms: it is read only unless you separately authorise payments, it expires, and you can kill it from inside your banking app at any time.

The scale is no longer trivial. In July 2026 the nine providers and 20 brands that publish performance data logged just under 2.94 billion successful open banking API calls, at an average response time of 330 milliseconds, with weighted availability of 99.99 per cent, according to Open Banking Limited’s own performance stats. That is the plumbing under every budgeting app that reads your transactions.

Two things follow that people get wrong constantly. First, an app reading your accounts cannot move your money. Second, giving an app access is not the same as giving it your login. Both of those distinctions come from the terms below.

The access words

AISP (account information service provider). The regulated permission an app needs to read your accounts. Every budgeting and subscription tracker on our budgeting apps that connect to your bank page holds one, directly or through a partner. An AISP sees balances, transactions, merchant names and dates. It cannot send a payment, cancel a direct debit, or change anything in your account. If an app claims it will “cancel your subscriptions”, read our page on what an app can actually cancel, because AISP access alone does not permit it.

PISP (payment initiation service provider). The separate permission needed to start a payment from your account. This is what happens when a savings app pulls money in, or when a retailer offers “pay by bank” at checkout. Each payment is approved by you in your own banking app. A firm can hold AISP permission, PISP permission, or both, and they are granted separately.

TPP (third party provider). The umbrella term for an AISP or a PISP. If you want to check one, the FCA register is the place, not the app’s own marketing.

ASPSP (account servicing payment service provider). Regulator language for the bank or building society that actually holds your account. You will see it in consent screens. It means “your bank”.

API (application programming interface). The bank’s dedicated connection that a TPP talks to. Before APIs, aggregators asked for your online banking credentials and logged in as you. That practice is what open banking was built to end, and any app still asking for your banking password in 2026 is not doing open banking.

SCA (strong customer authentication). Proving it is you with two independent factors, typically your phone plus a face or fingerprint check. It is required when you first connect an account and when you approve a payment.

Consent reconfirmation, the “90 day” thing. This is the single most misexplained term in UK money apps. Until March 2022, your bank had to make you re-authenticate an account connection every 90 days, and apps were losing a large share of users at that point. The FCA removed that. What replaced it is a lighter obligation on the app to reconfirm your consent every 90 days, inside the app, without bouncing you back to your bank. So if your budgeting app nags you every three months, that is the rule working as intended, not a fault. Whether the reconnection is a single tap or a full bank login now depends on the app, and it is a fair thing to judge one on.

The payment words

Faster Payments. The UK rail that moves most account-to-account money in seconds. Open banking payments ride on it, which is why “pay by bank” clears faster than a card refund ever will.

VRP (variable recurring payment). A standing permission you give once that lets a provider take varying amounts within limits you set, such as a maximum per payment and a maximum per month. Unlike a direct debit, the cap is yours and it is enforced by your bank.

Sweeping. The only VRP use case that was mandated and made free from the start: moving your own money between your own accounts, for instance topping up a savings pot or clearing an overdraft automatically. If your app calls a feature “auto-sweep”, this is the mechanism.

cVRP (commercial variable recurring payment). VRPs used to pay someone else, not just yourself. This is the live change in UK payments right now. The FCA published a statement on 2 June 2026 welcoming the launch of the UK Payments Initiative scheme that governs cVRPs, with the first wave covering utilities, financial services and government payments, and the FCA saying it will consult on a long-term regulatory framework by the end of 2026. In practice, over the next couple of years you should expect “pay by bank” to start appearing where a direct debit or a stored card used to be.

Confirmation of Payee. The check that compares the name you typed against the name on the receiving account and warns you if they do not match. Ignoring that warning is one of the fastest ways to lose money you will struggle to get back.

APP fraud reimbursement. If you are tricked into authorising a payment to a fraudster, sending and receiving firms must share the cost of reimbursing you, for eligible payments made on or after 7 October 2024. The maximum mandatory reimbursement is £85,000 per claim, your provider may apply an excess of up to £100 unless you are a vulnerable customer, and you have 13 months from the last related payment to claim. Note the number: £85,000 is no longer the FSCS limit, but it is still the scam reimbursement cap. Two different schemes, two different ceilings, and plenty of confusion between them.

The protection words, where most glossaries are out of date

FSCS (Financial Services Compensation Scheme). The statutory safety net if a UK bank, building society or credit union fails. On 1 December 2025 the deposit limit rose to £120,000 per eligible person, per banking licence, according to FSCS itself. Any page still telling you £85,000 has not been updated in a year.

Banking licence, and why it matters more than the brand. The £120,000 is per licence, not per logo. FSCS gives HSBC as its own example: HSBC, fd, first direct and fd bank all share one licence, so money spread across them shares one limit. Nationwide’s Derbyshire and Dunfermline brands sit under one licence too. The way to check any pair of brands is the Firm Reference Number on the FCA register: same FRN means one limit. This is the practical reason our emergency fund page tells you to spread large balances by licence rather than by app.

Temporary high balance. A separate, higher protection for life events such as a house sale, redundancy pay or an inheritance: up to £1.4 million, for six months from the date the money first landed. It is not automatic in the sense of being permanent, and it expires, so it is a window to move money, not a solution.

Safeguarding. What e-money and payment firms do instead of FSCS cover: your money is held in segregated accounts at licensed banks, kept apart from the firm’s own funds. It is real protection against the firm spending your balance, but it is not a compensation scheme. If the firm fails, you are claiming from a pot in an administration, and administration costs can come out of it. There is no government-backed payout and no fixed timetable.

E-money. A regulated electronic balance rather than a bank deposit. The distinction is the whole reason the two paragraphs above exist. Revolut is the clearest current example: it exited the mobilisation phase and became a fully licensed UK bank in March 2026, and its own explainer says new customers get FSCS-protected bank accounts automatically, while accounts are migrated in stages so “some existing accounts remain e-money accounts for now and continue to be fully safeguarded”. If you have had a Revolut account for years, which one you are on is a question worth answering in the app. Our page on whether digital banks are safe works through the same distinction for Monzo, Starling and Chase.

The trap this creates for savings apps is worth stating plainly. Several popular apps are not banks. They hold your money with partner banks, and your protection depends on which partner bank and how much you already hold there. We take Plum apart on exactly this point in is Plum safe and FSCS protected, and the same logic applies to its rivals.

The interest words, where you lose money quietly

AER (annual equivalent rate). The rate expressed as if interest were paid and compounded once a year. Its entire purpose is comparability: two accounts paying monthly and annually can be compared honestly only through AER. It is the number to compare on, and it is the one advertised rates hide behind least.

Gross. The interest before any tax is deducted. Since 2016 banks have paid savings interest gross, so gross is the number you will see almost everywhere, and paying any tax due is your job.

Net. Interest after tax. You will still see it on some products, and comparing a net rate to a gross rate is a classic mistake.

Bonus rate, or “includes a bonus for 12 months”. Not a formal term, but the mechanism behind most headline easy-access rates. The rate drops on a date the account already knows about. Diary the date when you open the account, because the app will not tell you loudly.

Personal Savings Allowance. How much savings interest you can earn before tax: £1,000 for a basic rate taxpayer, £500 for a higher rate taxpayer, and £0 for an additional rate taxpayer. With rates where they have been, a basic rate taxpayer can exceed £1,000 of interest on a fairly ordinary balance, which is when a cash ISA stops being a technicality. Our page on tax on savings app interest shows the balances at which it bites.

Starting rate for savings. A separate and widely missed allowance: up to £5,000 of savings interest tax free, but only if your other income is low. It shrinks by £1 for every £1 of other income above your Personal Allowance, and disappears once other income reaches £17,570. If you had a low-income year, check it.

The app-marketing words

Round-ups. Rounding each card purchase up to the next pound and moving the difference to savings. Mechanically simple, psychologically effective, and covered in detail in how round-up savings apps work. What varies between apps is whether round-ups are free, whether they are held with a bank, and what rate they earn.

Pots, spaces and jars. Sub-balances inside one account. They are a labelling feature, not a separate account, which matters twice over: they usually share the same FSCS limit as the parent account, and money in a pot is still yours to spend in two taps. Useful for planning, useless as a lock.

That is 27 terms in total. If you only remember three, make them these: FSCS is £120,000 per licence and not per brand, safeguarding is not FSCS, and an app that only reads your accounts cannot move your money.

Frequently asked questions

Is open banking safe? The mechanism is safer than what it replaced, because you never hand an app your banking credentials, the app’s permission is limited to what you approved, and you can revoke it from inside your own banking app at any time. What varies is the firm you are trusting with the data. Check it holds the right permission on the FCA register, and read our page on whether budgeting apps are safe for what to look for beyond the badge.

Can a budgeting app take money out of my account? Not with account information access alone. Reading your transactions and initiating a payment are two separate regulated permissions. An app can only move money if you also gave it payment initiation permission, and each payment or variable recurring permission is approved by you through your bank with strong customer authentication.

Why does my money app ask me to reconnect every 90 days? Because the app has to reconfirm your consent every 90 days. The old rule that sent you back to your bank to re-authenticate every 90 days was removed by the FCA in March 2022, and the obligation moved to the app. The prompt should be quick and in-app. If your app throws you into a full bank login every quarter, that is its implementation, not a regulatory requirement.

Is my money in a savings app FSCS protected? Only if it ends up in a deposit account at a bank, building society or credit union, and then only up to £120,000 per person per licence. Many savings apps are not banks. They pass your money to partner banks, so your protection depends on which partner and on what else you hold there. Some balances inside those apps are safeguarded e-money rather than protected deposits, which is a different and weaker thing.

What is the difference between FSCS protection and getting refunded after a scam? They are unrelated schemes. FSCS pays out when the firm holding your money fails, up to £120,000 per licence. Authorised push payment reimbursement applies when you were tricked into sending money to a criminal, is capped at £85,000 per claim, may carry an excess of up to £100, and must be claimed within 13 months of the last related payment.

Does an ISA have its own FSCS limit? No. A cash ISA is a deposit like any other, so it counts towards the same £120,000 limit at that banking licence. What an ISA changes is tax, not protection: interest inside it does not touch your Personal Savings Allowance.