The FCA and PSR have unveiled plans to accelerate the adoption of variable recurring payments. The view of UK regulators is that variable recurring payments will help consumers have more control over their regular payments.
Specifically, giving customers control over how much they can pay at one time or over the course of a month will reduce the risk of unexpected expenses.
For businesses, variable recurring payments provide greater competition to existing payment methods and can help reduce processing fees. They can also increase the percentage of customers who complete checkout, through better user experiences.
As part of the next steps to introduce variable recurring payments, Open Banking Limited will play a key role in establishing an independent central operator to coordinate how variable recurring payments are made.
VRP services will be available to consumers to make recurring payments to utilities, government and financial services companies.
Last week, the FCA wrote to the Prime Minister and Chancellor to say that “certainty and predictability underpin business and investor confidence”. Today’s statement is welcome clarity on the establishment of an independent central operator for variable recurring payments (VRPs). We need regulators and industry to pull in the same direction now and work out how to do this successfully with a view to launching VRPs as soon as possible this year.
The focus on variable recurring payments (VRP) is particularly exciting. It is clear from the UK National Payments Vision that continued success in account-to-account (A2A) payments and VRP development is critical to driving the UK’s digital innovation and economic growth agenda.
VRP is a breakthrough that provides consumers and businesses with a long-awaited, innovative alternative to seamless, flexible and competitive e-commerce payments, supported by a sustainable business model for banks.
We are pleased that the FCA and PSR have reached a decision on who will take forward the development of the cVRP MLA operator. 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 critical, along with the development of the commercial model and decision on bank participation, to launch Wave 1 use cases later this year. Ultimately, it is important to move forward so that we can achieve important learnings that will enable us to advance towards e-commerce use cases in 2026.