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.
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.
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.
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.