Commercial VRPs: The next phase of Open Banking

On 2nd June 2026, UK Payments Initiative Ltd (UKPI) announced the launch of a new payment scheme designed for the next generation of open banking payments. 

The announcement marks a significant step towards bringing commercial Variable Recurring Payments (cVRPs) into the mainstream. As a major evolution of open banking, it addresses the industry’s long-standing demand for a clear commercial framework and creates the conditions for broader market adoption. 

This announcement represents an important shift for Open Banking, moving from a predominantly regulatory-driven initiative to a commercially viable payments model. This has the potential to accelerate the adoption of account-to-account (A2A) payments for purchases, and increase transaction volumes on instant payment rails. Importantly, the framework creates clearer incentives for both payment initiation providers (PISPs) and account servicing payment service providers (ASPSPs), helping to establish the sustainable commercial foundations needed to incentivize all parties and scale open banking payments more effectively.

Notably, VRPs are not a new concept. They are already present in existing regulatory mandates for sweeping between personal accounts, and have long been viewed with the potential for other use cases, particularly in recurring payment use cases that remain heavily dominated by card-on-file and Direct Debit payment. The shift from sweeping VRPs to cVRPs requires only modest changes to existing technologies and infrastructure, enabling providers to launch new commercial use cases quickly and efficiently.

The central question now is no longer whether the infrastructure and commercial models exist, but whether cVRPs can deliver meaningful adoption at scale. Success will depend on whether banks, payment providers and merchants can demonstrate clear value to businesses and consumers, translating capability into everyday payment behaviour. 

What are commercial VRPs?

In simple terms, cVRPs are variable recurring payments for everyday consumer-to-business payments. They extend the functionality of VRPs beyond ‘sweeping’, where money is moved between accounts held by the same person, (i.e. ‘me-to-me’ payments), to encompass a broader set of use cases. This includes household bills, subscription services, instalment payments, embedded / in-app payments and e-commerce or in-store purchases.

Why do commercial VRPs matter?

Commercial VRPs present the banking and payments industry with an opportunity to address one of its most persistent challenges: how to create payment experiences that offer viable alternatives to card and/or direct debit payments. 

While open banking successfully enabled account-to-account payments, consumer adoption has often lagged behind expectations. A key reason is that card payments remain deeply embedded in consumer behaviour, offering convenience, familiarity and well-established consumer protections. To drive meaningful change, open banking must offer a better payment experience and deliver more than an alternative payment rail.   

cVRPs have the potential to achieve this goal. Unlike traditional recurring payment models, VRPs allow consumers to provide consent for a series of future payments within agreed parameters (e.g. amount, frequency), while retaining greater visibility and control over how those payments are executed, for example through a screen in their banking app. This creates a more flexible and transparent approach to recurring payments, giving consumers confidence over what they have authorised and when payments will be made. 

As a result, cVRPs could meaningfully reshape recurring payment behaviour, particularly in areas such as household bills, subscriptions, and frequent payments to the same retailer (eg supermarket). These are areas where consumers value convenience but increasingly expect control and transparency.

However, success will ultimately depend on whether cVRPs deliver genuinely superior customer propositions rather than simply introducing a new payment mechanism. Superior propositions will ultimately be defined by improvements in convenience, control, speed, reliability, cost and security.  

Hurdles to adoption

Yet amid all the policy and regulatory talk, innovators are yearning for conclusions and decisions to be made to move cVRP forward. To drive the growth of VRPs in Phase 1, a critical mass (say over 80%) of all banks’ customer accounts will need to be available for processing commercial Variable Recurring Payments. For this, many across the industry are calling for the introduction of a commercial model or framework.

Banks have invested heavily to deliver the CMA’s Open Banking mandate, and while there is broad recognition of the rich potential and value that cVRPs stand to deliver, they also have the potential to cannibalise revenue from debit and credit card transactions.

Although it remains to be seen whether the industry can agree on a commercial model or if regulatory intervention will be needed, in any case, VRP-type activity is ramping up. Visa, for example, announced in September a new ‘open system’ for account-to-account (A2A) payments – its “Visa A2A” service - which will be launching next year. Visa will still need the Tier 1 banks to engage constructively.

The infrastructure impact on banks 

While much of the discussion around cVRPs has focused on customer experience, the implications for banking and payments infrastructure could be equally significant

cVRPs have the potential to materially increase transaction volumes on Faster Payment systems, requiring a greater emphasis on operational performance, scalability and resilience.   

This shift represents a potential reconfiguration of how recurring payments are initiated, processed and managed across the industry. Banks will need to assess their system design and roadmaps to ensure they are prepared for the change in payment flow and increased volumes. Banks will also need to reassure customers that their payment systems can support sustained growth while continuing to deliver the reliability and performance they expect from critical payment services.

Accelerating VRP capabilities

For a sending bank that is processing variable recurring payments via a third-party provider, there is minimal additional development work beyond what is already in place. Commercial VRPs can use the same VRP standard and APIs.

But for banks that want to offer their own VRP product, moves must be made now to accelerate the design and build of the systems that will be needed to compete. In the coming months, the focus on cVRP is going to shift from building to offering. While there is already significant fintech activity focused on creating compelling VRP payment propositions, once the PSR’s Phase 1 is underway, the competition is only going to heat up.

Icon works closely with clients to design and implement leading-edge payments systems for real-time payment services, based on our Payments Reference Architecture model. It is our view that the key domains for establishing VRP capabilities lie in Order Management, Value Added Services, and Payments Channels. If you would like to learn how we can help, get in touch.

Only time will tell

The UKPI announcement represents a positive and welcome step for the open banking ecosystem, and has the potential to deliver additional choice and convenience for consumers.

However, the underlying challenge remains the same since the initial emergence of open banking: how to move from infrastructure availability and low-volume services to sustained, everyday consumer and merchant adoption.

Success will ultimately depend not on the availability of capability, but on whether the industry can translate that capability into everyday payment behaviour at scale.