The UK Payments Initiative (UKPI) was established in late 2025, a new company formed by 31 firms to operate a commercial Variable Recurring Payments (VRP) scheme - the first significant new open banking payment product beyond one-off transfers.
Open Banking Scale
UK open banking reached 16 million active users in 2025, with 53% year-on-year growth in open banking payment volumes. VRPs already account for 16% of all open banking transactions, demonstrating demand for recurring account-to-account payment capabilities.
Commercial VRP Phases
Phase 1 use cases target utility payments, financial services payments, and payments to local and central government. First live commercial VRP payments are expected in Q1 2026. The PSR published a delivery update in December 2025 outlining the rollout timeline.
Why VRPs Matter
Variable Recurring Payments allow consumers to authorize merchants to pull payments from their bank accounts on a recurring basis - similar to direct debits but with real-time execution, variable amounts, and granular consent controls. They could eventually challenge the Direct Debit scheme for subscription billing, utility payments, and rent collection.
What This Means
For payment professionals, commercial VRPs represent a new rail for recurring merchant payments that bypasses card networks entirely. The 31-firm coalition includes banks and fintechs, suggesting broad industry commitment. Success will depend on consumer adoption and merchant integration - areas where open banking has historically lagged behind the technology's potential.
Sources: FCA, PSR cVRP Update