A coalition of 31 financial institutions is funding a new company to deliver commercial variable recurring payments (cVRPs), offering consumers a flexible, real-time alternative to Direct Debits and stored cards.
Amid a flurry of regulatory updates and fintech product launches, a quiet but potentially transformational milestone has been reached in the UK payments landscape.
On May 2, a consortium of 31 major financial institutions — spanning high street banks, challenger fintechs, and payment service providers — has agreed to jointly fund the creation of a new company to develop and deliver the first commercial phase of commercial variable recurring payments (cVRPs).
This industry-led initiative, formed in response to a UK government call-to-action issued in late 2024, marks a crucial step toward bringing cVRPs to market at scale. If successful, the effort could redefine how recurring payments are structured, controlled, and executed in the UK — offering a next-generation alternative to Direct Debits and stored card credentials.
The cVRP model leverages open banking rails to enable customers to authorise recurring payments within flexible, user-defined limits — such as a monthly cap or frequency — with payments routed over the Faster Payments network. This combines the automation of traditional recurring models with the speed, control and transparency of real-time account-to-account payments.
“This is a significant moment for the industry,” said Henk Van Hulle, CEO of Open Banking Limited (OBL), the body overseeing open banking infrastructure in the UK. “It’s testament to the collaborative nature of our ecosystem that we can deliver this through an industry-led approach.”
Focused but strategic use cases
The initial deployment — known as Wave 1 — will prioritise regulated sectors such as utilities, rail, government services, charities, and financial services firms, where predictable but flexible payments are a critical user need. These verticals represent both high-volume use cases and trusted institutional relationships, making them ideal candidates for early adoption.
While cVRPs have existed in a limited capacity under current open banking mandates, their commercial deployment has been hindered by the lack of a centralised governance and operational model. This newly announced independent entity — to be funded by the 31 participating firms — will provide that missing infrastructure.
Among those backing the initiative are HSBC, Barclays, Lloyds Banking Group, NatWest, PayPal, Monzo, Revolut, Starling, Wise, Mastercard Open Banking Services UK, and open banking specialists such as TrueLayer, Plaid, Yapily, and GoCardless.
A turning point for Open Banking?
Since the UK’s open banking framework went live in 2018, adoption has grown steadily. According to OBL figures, more than 13 million consumers and SMEs are now using open banking-powered services, with over 27 million payments processed in March 2025 alone — up 67% year-on-year. Of those, nearly 3.7 million were variable recurring payments.
However, most of that growth has been concentrated in single-instance payments — bill splitting, account aggregation, or one-off bank transfers. cVRPs represent the first major attempt to make open banking a viable alternative to legacy recurring payment rails.
Critically, cVRPs offer an opportunity to rebalance market power in the UK payments ecosystem. Today, recurring payments remain dominated by Direct Debits — which offer limited control to consumers — and card-on-file arrangements, which incur fees and are subject to complex dispute mechanisms. cVRPs propose a real-time, API-driven option that aligns better with modern consumer expectations around personalisation, consent, and instant settlement.
Governance and funding of cVRPs
The new entity will be wholly owned by industry, with its initial phase focused on operational delivery and standards setting for Wave 1 use cases. A decision on long-term funding and governance is expected following a review of this initial implementation period.
This approach aligns with the UK government’s National Payments Vision, published in 2024, which advocates for market-led innovation, greater consumer choice, and reduced dependency on legacy infrastructure.
While the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) are not directly funding the initiative, their public endorsement of a multi-stakeholder governance model has helped accelerate cross-sector collaboration.
What comes next?
The coming months will be critical. Pilot schemes, technical standards, and commercial models will need to be defined, tested and agreed. OBL has already published a consultation on the Minimum Level of Access (MLA) for cVRPs, with feedback expected to shape the rollout strategy.
If executed effectively, cVRPs could pave the way for broader open finance innovations — allowing consumers and businesses to move money more fluidly, securely and affordably than ever before.
For payments professionals, this initiative represents more than a new product. It is a signal that open banking is entering a more mature, commercially viable phase, where infrastructure, consumer experience, and business models are beginning to align.
As ever, the devil will be in the implementation. But for now, the consensus is clear: the groundwork for the next chapter in UK payments is well underway — and it may arrive sooner than many anticipated.
