The FCA and PSR have revealed plans to accelerate the adoption of variable recurring payments. The UK regulator believes variable recurring payments will help consumers take more control of their regular payments.
In particular, giving customers control over how much can be paid at once or over the course of a month will reduce the risk of unexpected expenses.
For businesses, variable recurring payments offer more competition to current payment methods and can help reduce processing fees. They could also increase the proportion of customers who complete the payment through better user experiences.
As part of the next steps to deliver variable recurring payments, Open Banking Limited will play a key role in establishing an independent central operator to co-ordinate how variable recurring payments are made.
VRP services will be available to consumers for recurring payments to utilities, government and financial companies.
Last week the FCA wrote to the Prime Minister and Chancellor that “certainty and predictability underpin business and investor confidence”. Today’s announcement is welcome clarity that an independent central operator for Variable Recurring Payments (VRP) will be created. We need regulators and industry to move in the same direction now and work out how this will be successful with the aim of launching VRPs as early as possible this year.
The focus on variable recurring payments (VRP) is particularly exciting. It is clear from the UK’s National Payments Vision that further success in account-to-account (A2A) payments and the development of VRPs are key to driving the UK’s digital innovation agenda and economic growth.
VRP is a breakthrough that provides consumers and businesses with an innovative and long-awaited alternative for seamless, flexible and competitive e-commerce payments, backed by a sustainable commercial model for banks.
We are pleased that the FCA and PSR have reached a decision on who will drive the development of cVRP MLA Operators. We look forward to working with OBL, UK Finance and the wider ecosystem to shape the Operator over the coming months. Progress in this regard is key, along with the development of a commercial model and the bank’s participation decision, to launch the 1st wave of use cases later this year. Ultimately, it’s critical to get moving so that we can gain key learnings that will allow us to advance e-commerce use cases in 2026.
