UK open banking payments have seen 70% year-on-year growth, with Variable Recurring Payments (VRP) taking a rapidly growing share. Previously limited to "me-to-me" account sweeping, VRP is now expanding into commercial use cases (cVRP) in 2026. This brings recurring open banking payments to businesses relying on high-volume repeat transactions.
This blog explores the benefits of recurring payments for merchants and PSPs, preparing them for its launch to market.
What are recurring open banking payments?
Recurring payments (also known as bank-on-file) is an evolution of open banking technology that extends VRP beyond the limitations of sweeping use cases into commercial applications. This opens the door for widespread e-commerce use cases by enabling customers to authorise multiple payments from a merchant under a single consent.
The payments can vary in amount, and the transaction amount limits are agreed on upfront during the authorisation process in the “VRP mandate”. This makes recurring payments a direct alternative to Direct Debit and card-on-file payment options, enabling subscription payment and one-click checkout capabilities.
cVRP vs. Direct Debit vs. Card-on-file
Feature | Recurring open banking payments | Direct Debit | Card-on-File |
Setup authentication | Strong SCA once | Paper/online form | Card details entry |
User-defined limits |
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Instant cancellation |
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Settlement speed |
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Fraud protection |
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Failure rate |
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Chargeback risk |
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Why do recurring open banking payments matter?
Recurring payments finally bridge the gap between the built-in security of open banking and the seamless experience of one-click checkouts and subscription payments. It’s a practical upgrade that solves structural disadvantages for merchants, the PSPs that power them, and consumers.
How recurring payments benefit merchants
Higher conversion: Fewer failed payments and lower churn from removing points of friction like expired cards and incorrect details. This means better payment success rates and increased customer lifetime value.
Lower costs and better margins: Reduced transaction fees and reduced chargeback risk vs. cards directly increase margins.
Stronger consumer trust: Removing the need for repeated manual authentication creates a more positive experience, making you the preferred merchant.
Better cash flow: Funds settle instantly, eliminating the three-day cash flow gap inherent to Direct Debit.
How recurring payments benefit consumers
Clear spending control: Customers set limits during mandate creation and can view or cancel directly through their bank.
Simple checkout experience: Setup is frictionless, and no repeated entry or mandate improves the customer experience.
Strong authentication: Open banking relies on SCA biometrics rather than easily compromised card details or manual bank detail entry, resulting in lower fraud risk.
How recurring payments benefit PSPs
Meet merchant demand early: Capture merchant demand across rollout phases, giving your platform an acquisition advantage.
Drive retention: Optimise your payment stack with instant settlement and lower failure rates to pass on structural cost savings and drive better conversion.
Better profit margins: Benefit directly from the lower transaction fees and reduced chargeback risks inherent to account-to-account payments.
Future-proof infrastructure: Lay the groundwork for emerging technologies like Agentic Commerce, where AI agents will autonomously manage and authorise recurring transactions.
How do recurring open banking payments work?
The setup process is fast, enabling an easy setup and checkout experience.
Setting up a cVRP mandate
Select one-click setup
Enter mandate parameters
Select bank
Secure login
Confirm mandate
Paying using recurring open banking payments
Once the mandate is set up, consumers can pay on the merchant website in one click or take subscription payments as required.
When will recurring open banking payments launch?
The rollout of cVRP is actively underway, so the window to secure a first-mover advantage is closing.
Wave 1
Wave 1 is introducing recurring payments to key regulated sectors, creating immediate urgency for platforms serving these industries:
Regulated financial services
Rail tickets and utilities
Registered charities
Government agencies
Wave 2
Wave 2 will rapidly follow, meeting merchant demand for payment options tailored specifically to e-commerce use cases. Preparation must start immediately to capitalise on this evolution; testing and pilots are already taking place. Payment and strategy leaders need cVRP integrated into their active roadmaps to avoid losing market share.
Why partner with Yapily for recurring open banking payments?
Successfully rolling out recurring payments requires reliability and scale in your infrastructure. Over the past 12 months, Yapily has processed 47.2 million payments and handled 721 million successful API calls, giving PSPs and merchants the reliability they need.
Yapily is built to meet these rigorous commercial requirements:
Foundational expertise: As part of the founding VRP Working Group, we support early-scale deployments and have the expertise to build high-performing services.
High-performance infrastructure: Prioritise speed and stability with direct-to-bank APIs so engineering teams can ship faster and reduce overheads.
Comprehensive connectivity: Power recurring payments across extensive business and consumer account coverage from a single integration.
Total UX control: Deliver cVRP through direct APIs or hosted experiences.
Unified proposition: Simplify rollout with a single integration combining payment acceptance, merchant onboarding, and credit decisioning.
Unlock rich data opportunities
A single integration for payments and data unlocks powerful possibilities. As recurring open banking shifts to continuous payment flows, it generates valuable longitudinal data. This empowers you to build smarter value-added services like advanced retry logic and churn prediction as your merchants scale.
Read our blog on compounding value with payments + data.
Get started with recurring open banking payments
With Wave 1 launching in 2026, now is the time to evaluate how recurring open banking payments fit into your roadmap.
Speak to our team to explore implementation options.