FCA sets up commercial scheme for variable recurring payments

VRPs are a form of payments instruction that allows customers to authorise registered payment service providers to initiate payments from their bank account on an ongoing basis, where the timing or the amount might vary, within agreed limits. It supports use cases such as subscriptions, one-click checkout and usage-based billing without relying on stored card details

The FCA says the UK Payment Initiative (UKPI) will operate a commercial VRP scheme, enabling consumers to make flexible, recurring payments to businesses such as utility providers. The commercial scheme will deliver a seamless alternative to card-on-file and direct debits, and support the next phase of Pay by Bank adoption across the UK.

The development comes after a group of 31 fintechs, high street banks, challenger banks and payment providers in May agreed to put up initial funding for the new entity that will be wholly owned and run by industry. Barclays, GoCardless, Mastercard, Monzo, Plaid, Revolut, TrueLayer and Wise are among the backers.

The first live payments under the UKPI scheme are expected in the first quarter of 2026.

The number of open banking payments in the UK has soared by 53% year on year, with more than 16 million users adopting the account-to-account payment method.

TrueLayer COO Rob Kerrigan, who will take a seat on the board of the new company, comments: “Like other European countries that have adopted A2A payment methods as standard, Pay by Bank in the UK – powered by open banking – is now moving quickly toward commercial adoption at scale. VRP is the essential next step towards reducing the UK’s long-term reliance on incumbents such as Visa and Mastercard. Merchant demand is clear, and today marks a significant step towards making this a reality.”