Pay by bank and commercial VRP: should you care yet?

2 November 2026

Commercial variable recurring payments let customers approve ongoing bank payments within their own limits. The scheme is live for bills, not yet for shops. What it is, who it suits now, and what to check before changing how you take payments.

Commercial variable recurring payments (commercial VRP) let a customer give a business ongoing permission to take payments straight from their bank account, within limits the customer sets in their banking app. For most card-taking shops, cafés and salons it changes nothing yet: the scheme went live in June 2026 for bills such as utilities, government and financial services, and rules for online and retail payments are still being worked on.

That makes now a good time to understand it, without rushing to change how you take payments. Here is what it is, who it is for at the moment, and what to check before you make any decisions.

What is commercial VRP?

Most people have met open banking as a one-off "pay by bank" button: you choose your bank, approve the payment in your banking app, and the money moves over Faster Payments. Variable recurring payments take that a step further. Instead of approving each payment, the customer approves an arrangement once, with limits on who can take money, how much, how often and for how long. They can see and cancel it in their banking app.

A version called "sweeping" VRP, for moving money between your own accounts, has been free and mandatory for the largest banks since 2022. Commercial VRP is the version where the payment goes to a business.

The scheme is run by the UK Payments Initiative (UKPI), a company set up by 31 firms from across the payments industry, including banks and payment firms. Its founding shareholders include Barclays, HSBC, Lloyds Banking Group, NatWest, Santander, Nationwide, Monzo, Starling and Revolut. The Financial Conduct Authority (FCA) is the lead regulator for open banking and works with the Payment Systems Regulator.

Who can use it now?

The first wave covers a short list of sectors:

utility bills, such as energy, water and broadband
regulated financial services, such as mortgage and pension payments
local and central government payments
registered charities, for regular donations

General retail and online shopping are not in the first wave. The FCA has said the long-term rules are meant to be "the foundation for expanding cVRPs into e-commerce", and it plans to consult on those rules before the end of 2026. Until that happens, most small businesses will not be offered commercial VRP by their payment provider, and the ones that are should read the terms carefully.

What this means for your business

If you take most of your payments face to face, on a card machine or a Square POS, cards stay the default for the foreseeable future. Customers know how to tap, they trust card protection, and there is no sign of a bank payment that is as quick at a busy counter.

Where commercial VRP may matter sooner is regular billing: memberships, subscriptions, monthly service plans, larger invoices and accounts that customers top up. In those cases, possible advantages are:

money arriving within seconds over Faster Payments, rather than on a next-day card settlement
no failed payments because a customer's card has expired
pricing that early industry plans describe as a fixed amount per payment, rather than a percentage of the value

Each of those comes with a condition:

no headline price had been published at launch, so you cannot yet compare it with what you pay for cards
card payments come with a chargeback process that customers know well; commercial VRP has its own safeguards and dispute process, but the FCA is still considering what level of consumer protection is right
your customers have to be willing to approve a new kind of payment, and some will prefer the card or Direct Debit they already use
not every bank or payment provider offers it yet

In short: worth watching, not worth switching for today.

What should you do now?

Know what cards really cost you. You cannot judge any alternative without a clear view of your current card fees. Look at your last three monthly statements and find the total charged, not just the headline rate.
Ask your payment provider about their open banking plans. If they offer "pay by bank", ask what it costs per payment, how refunds work, and whether recurring payments are included.
Separate your payments by type. Face-to-face, online one-off and regular or recurring payments behave differently. Commercial VRP is only likely to be relevant to the last group in the near term.
Do not sign a long contract just to get it. If a provider offers commercial VRP as part of a new deal, check the notice period and exit fees on the whole package.
Watch for the FCA consultation. The rules for e-commerce payments are the ones that would bring commercial VRP to most small retailers.

How we look at this in a card fee review

When we review a business's card statements, we do not start with the newest payment method. We start with how the money actually comes in. A typical review looks like this:

We split the last few months of takings into face-to-face card payments, online payments and any regular or account payments.
We work out the effective cost of each group, meaning total fees divided by total takings, including monthly charges, terminal rental and any minimum fees.
For regular or account payments only, we note whether open banking or commercial VRP could be an option, and what you would need to find out from a provider before it could be compared fairly.
We tell you plainly if your current set-up is reasonable and no change is needed.

We do not promise a saving from any review. Some businesses are already on a fair deal, and the right answer is to stay put.

Frequently asked questions

Is commercial VRP the same as Direct Debit?

No. Both take regular payments from a bank account, but with commercial VRP the customer sets limits and approves the arrangement in their banking app, and payments move over Faster Payments. Direct Debit is set up through a mandate and has its own guarantee.

Can I take commercial VRP payments in my shop today?

Probably not. The first wave covers utilities, financial services, government and charities. Retail and online payments depend on rules the FCA plans to consult on before the end of 2026.

Will it be cheaper than card payments?

We do not know yet. Early industry plans point to a fixed fee per payment, but no headline price had been published at launch. Compare real quotes against your own card statement before deciding.

Get a clear view of your card costs

If you want to know what your card payments really cost and whether anything is worth changing, book a free card fee review. We also help with card machines and Square POS setup. Call or WhatsApp 07777 175890.

Jos Finserv Ltd (company no. 14560046) is an independent broker. For business finance we are a credit broker, not a lender, and we may receive commission from providers. Approval and terms depend on your trading history. No obligation.

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