Commercial Variable Recurring Payments (cVRP) is soon to be rolled out in the UK. So far, 10 major UK banks, including Lloyds, NatWest, and HSBC, have committed to integrating, which means between 75% and 90% of UK personal current account coverage. The UK Payments Initiative (UKPI) and Financial Conduct Authority (FCA) are working with industry participants to deliver cVRP in several “waves”.
In scope for Wave 1 are regulated financial services, utilities, rail, government, and charities. Get a quick summary of cVRP in our cVRP overview. Wave 2, expected in late 2026 or early 2027, will cover wider e-commerce and lending use cases.
But wave 1 isn’t a pilot phase; it offers a commercial opportunity to build a first-mover advantage in the future of recurring payments.
How cVRP Wave 1 is a commercial opportunity
Wave 1 verticals were chosen due to their low fraud risk and because payees are mostly regulated or have clear consumer protections that map onto the scheme's dispute framework.
But the commercial failure of current recurring payment options is clearly shown in the numbers:
Overall, UK Direct Debit failure averaged 2.29% in May 2025 and is trending up year-on-year.
Between 20 to 40% of subscription churn is driven by payment failure, not intent.
Every Wave 1 vertical is dealing with rising failure rates and regulatory or margin pressure, so the product-fit with cVRP is already there. If you’re serving any verticals that fall into wave 1, now is the time to move to achieve an early mover advantage and compound the benefits:
Boost acquisition: These sectors are actively looking for payment alternatives.
Increase margin relief: cVRP's flat-fee pricing beats standard Direct Debit at SME scale and outcompetes card-on-file at higher prices, giving you a clear USP that challenges each payment option.
Improve retention rates: The mandate and long-lived payment consent offers more control and builds trust for customers, increasing retention and reducing churn.
Wave 2 readiness: The cVRP stack that works in Wave 1 is the same stack that ships in Wave 2, positioning any business that offers it now as a market leader once use cases are expanded.
cVRP demo for energy and mortgage
How cVRP unlocks new commercial value for each wave 1 vertical
Regulated financial services
Recurring collection in financial services is a quietly expensive problem. Pensions, mortgages, savings, and investment products are mostly processed via Direct Debit or manual transfer. This means:
Three-day Direct Debit settlement creates timing drag on unit-priced products where prices move daily.
No funds confirmation means failed collection cycles that push up admin costs and reduce trust.
Paper and online payment mandates lose customers at activation, increasing abandonment.
Customers who fail a collection rarely re-engage; this quiet churn often surfaces later or is written off as “industry standard”.
Where cVRP delivers benefits: All FSCS-eligible products (pensions, mortgages, and investments) are in scope for Wave 1. This enables teams to offer:
Variable contributions within mandate limits reduce drop-off because there’s no re-authentication required.
Instant settlement into unit-priced products removes the multi-day timing drag, offering more accurate collections for dynamic pricing.
Bank-on-file collection for regular saver and pension top-up flows drives retention through better customer experience.
Friction-free activation increases conversion success for sign-ups into funded accounts.
Your first-mover advantage: Moving first with a solution that increases uptake and reduces operational costs in FS means you’ll be ahead of the curve. For lending and credit institutions, this will also carry through into Wave 2 use cases and beyond, which could include unsecured loans.
Utilities
Utilities is where the Wave 1 product-fit is sharpest. Failed payments have tangible outcomes for customers: supply cut-offs, forced collections, and even legal action. The numbers show these problems are becoming more acute:
Energy Direct Debit failures rose 39% year-on-year in early 2024.
UK domestic energy debt reached £4.43 billion by June 2025, with nearly 75% held by customers with no repayment plan.
An estimated 25 million UK consumers could be affected by income volatility, and fixed-date Direct Debit routinely misses payday.
14% of energy Direct Debit customers say they would switch payment method if given one. This is roughly 5.5 million accounts.
Where cVRP delivers benefits:
Payment amounts can track actual consumption within mandate limits, offering fairer, more accurate usage-based payments in real time and leading to fewer failed payments.
Confirmation of funds before each collection breaks the failed-payment-to-debt pipeline, reducing the need for cutting customers off or taking legal action, saving costs.
Payment initiation can align to payday rather than a fixed monthly Direct Debit date, offering better flexibility for customers on variable income to improve the customer experience.
Bank-app cancellation cuts complaint volume and call-centre costs, allowing you to reinvest or offer more competitive rates.
Your first-mover advantage: Utility providers get to make a rare pitch: better collection outcomes and lower cost per transaction. cVRP allows you to undercut standard Direct Debit at typical consumer utility bill sizes, offering a win-win for you and your customers.
Rail
Rail is a sector where payment systems haven’t kept up with the modern booking platforms of other industries. Fares vary by time, route, and usage, and current recurring payment methods don't handle that well:
Dynamic fares need reconciling after the fact, driving back-office costs.
Season-ticket auto-renewal breaks when cards expire or get reissued, causing churn and dissatisfied customers.
Per-transaction card fees eat into margins on low-value, high-volume journeys.
Complex reimbursement for delayed or cancelled journeys means up to a 28-day wait for refunds.
Where cVRP delivers benefits:
One-click checkout on every purchase after a single mandate setup improves the buyer experience and reduces churn.
Fare amounts flex within mandate limits to match the time of travel, route, or usage, so customers don’t accidentally overpay.
Near-instant settlement enables automated delay or cancellation reimbursement, landing refunds before complaints get written, lowering call centre costs.
Lower per-transaction cost than cards means train operators can reinvest in their platform or customer loyalty schemes.
Your first-mover advantage: Rail is one of the clearest UX wins in Wave 1 cVRP. Platforms that bring it to market first will be the blueprint for service-based subscription and one-click payments when Wave 2 opens up to adjacent travel and mobility verticals (think airfares, taxis, ebike rentals).
Government
Government recurring and one-off payments are points of friction that are typically stuck in the past. Council tax, road user charging, TfL Auto Pay, licence fees, and court fines are examples of the types of payments that cVRP can modernise.
Manual invoice data entry carries an average error rate of around 10%.
Collection enforcement costs for failed payments are usually above the value of the original transaction, driving up costs.
Citizen cancellation typically routes through a phone line, driving complaint volume, call-centre costs, and high abandonment rates.
Billing schedules are fixed and don't flex to actual consumption or availability of funds, increasing failed payment collection rates.
Where cVRP delivers benefits:
Council tax instalments can be taken when money lands in the account, rather than equalised monthly blocks, reducing failed payments due to insufficient funds.
Transport and licence auto-pay doesn't expire when a card does, reducing accidental payment failures and the issuing of fines.
Recurring penalty and fee collection with flexible amounts under pre-agreed ceilings means costs saved on chasing payments.
Bank-app cancellation and creation takes volume off the public-sector phone line, saving taxpayers' costs.
Your first-mover advantage: Public sector open banking conversations usually stall on compliance questions. The UKPI scheme rulebook, FCA backing, and the future (to be announced) dispute framework support those, so you can have confidence that cVRP will deliver a new era for public sector payments.
Charities
Charities are absorbing failed collections on margins that were already tight. The donation journey has become one of the most fragile points in the fundraising economy:
Around 30% of stored cards become obsolete each year through expiry, reissue, or account closure.
Every failed donation in the UK carries a double cost: the missed contribution and the Gift Aid claim that went with it.
Rising Direct Debit failure rates translate directly into broken donor journeys and stretched fundraising teams.
The benefits cVRP delivers:
Variable giving mandates that let donors set a monthly cap with flex upward for appeals and emergencies, assuring them that they won’t be charged more than they’re willing to give, which drives trust.
Instant settlement gives budget-tight charities access to liquidity sooner, helping balance the books and have more financial breathing room.
Lower fees than cards means more of each donation reaches the cause, directly increasing the impact of every donation made using cVRP.
Bank-app cancellation reduces commitment anxiety for givers, reducing barriers to sign-ups at the first ask.
Your first-mover advantage: Charities can relieve their tight margins and protect donor lifetime value, revitalising a sector that’s been underserved by established payment options for decades.
Why now is the time to act: Wave 1 readiness is already here
The usual concern with any open banking rollout is bank participation. Between 75% and 90% of UK personal current account market share is already committed for cVRP:
Lloyds (25–30%)
NatWest (15–20%)
HSBC (10–15%)
Santander (10%)
Barclays (15%)
Additionally, Nationwide, Monzo, and Revolut are committed to the FCA and expected to follow as technical readiness allows.
How Yapily is actively shaping cVRP
Yapily is a founding member and shareholder of UKPI, the FCA-backed body operating the Wave 1 scheme. That gives us direct input into scheme development, early sight of Wave 2 planning, and a seat where pricing, rulebook, and dispute-framework decisions are made.
We’re a partner that's actively writing the commercial framework for cVRP in the UK. The commercial model gives banks a revenue incentive to provide APIs so they are aligned on delivering consumer protection, dispute resolution, and reliability for a complete solution.
Here’s what matters when evaluating cVRP partners:
Scheme-direct access from day one, so there’s no separate scheme relationship to build
Pricing built for Wave 1 economics
Strong bank coverage across Europe from a single integration, via hosted UI, API-only, or hybrid flows
The same infrastructure that ships Wave 1 also ships Wave 2, raising the value of your early mover advantage.
Get ahead of the wave
Wave 1 is scheduled for launch very soon and is expected to quickly build momentum in the market. Book a call with an open banking expert to secure your first-mover advantage and turn cVRP Wave 1 into a commercial opportunity.