A group of 31 players in the open banking and payments industries has committed to funding the creation of a new company aimed at commercializing Variable Recurring Payments (VRPs) in the UK.
VRPs enable customers to authorize registered payment service providers to initiate payments from their bank accounts on an ongoing basis, allowing for variability in timing or amount within agreed limits. Financial regulators have been gradually setting the groundwork for VRPs, and late last year, the government called for industry involvement to ensure the effective implementation of commercial variable payments (cVRPs).
This coalition of fintech firms, high street banks, challenger banks, and payment providers, including Barclays, GoCardless, Mastercard, Monzo, Plaid, Revolut, and Wise, has agreed to provide initial funding for this new industry-led entity.
The initial use cases for cVRPs will focus on regulated sectors such as utility and rail payments, as well as transactions involving financial firms, e-money institutions, government bodies, and charities. Offering cVRPs in these areas will enhance control over regular payments and offer a smoother experience for purchasing goods or services online.
Henk Van Hulle, CEO of Open Banking Limited, expressed, “This is a significant moment for the industry, and I sincerely thank the organizations that have committed to funding efforts to create a company for advancing cVRPs. It showcases the collaborative spirit of our ecosystem, demonstrating that this initiative can be industry-led.”