Explained to kids!
A variable recurring payment is when you say “yes” once, and a shop can then take money from your bank account again and again. The amount can change each time. But it can never go above the limit you chose, and you can stop it whenever you want.
Let’s see it in real life…
Every Wednesday, a farmer brings a box of vegetables to Zara’s building.
Some weeks the box is small, some weeks it is full of pumpkins and leeks.
So the price changes: €18 one week, €26 the next.
Zara’s mom said “yes” once, with one rule: “Never more than €30 a week.”
Now the farmer takes the right amount each Wednesday, and nobody has to count coins.
One day, he wants to add a giant watermelon, and the box would cost €40.
“It won’t work,” says Zara. “Mom’s limit is €30!”
The farmer has to ask first, and Mom decides.
And if the family moves away, Mom can stop the payments in one minute.
That is a variable recurring payment.
Tiny recap
- It means… one “yes” for many payments that can change, inside limits you choose.
- It helps when… the amount is different each time, like a box of vegetables.
- Watch out for… choose limits that make sense, and remember you can stop it at any time.
…detailed for specialists
Variable Recurring Payments (VRP) let a customer give a regulated payment provider one long-lived consent to initiate bank payments to a payee, for amounts that can vary, within limits the customer sets: maximum per payment, maximum per period, end date. VRPs are an open banking alternative to direct debit and to cards stored on file.
2026 is the year VRP moves beyond moving money between your own accounts. In the UK, the first commercial VRP scheme launched on 2 June 2026, run by the industry-led UK Payments Initiative (UKPI). Brazil runs a comparable model with Pix Automático. For PSPs and platforms, VRP opens a new way to collect bills and subscriptions on instant rails.
What are variable recurring payments?
With a VRP, the customer authorizes a payment initiation service provider (PISP) once, inside their banking app. The PISP can then trigger payments from the customer’s account to a specific payee, without asking the customer to authenticate each time, as long as every payment stays within the agreed limits. Each payment travels on instant rails, so it settles in seconds.
- Versus direct debit: direct debit is a pull payment processed in batches, with a mandate held by the payee. A VRP is a push payment initiated on the customer’s behalf, settled instantly, with limits the customer controls in the bank app.
- Versus a card on file: no card expiry or reissue, no interchange. But no card-scheme chargeback either: protections come from the VRP scheme rules.
- Versus a single pay-by-bank payment: a one-off payment needs strong customer authentication each time. A VRP needs it only when the consent is set up.
Typical use cases are payments that repeat but change in amount: utility bills that follow consumption, phone plans, insurance premiums, loan repayments, donations and savings top-ups. Later come subscriptions, wallet top-ups and pay-as-you-go services in e-commerce.
How VRP works
- The payee proposes a consent through its PISP: who is paid, the maximum per payment, the maximum per month, and the validity period.
- The customer is redirected to their bank, authenticates with strong customer authentication and approves the parameters.
- The bank issues a consent that the PISP can use through the bank’s API.
- For each payment, the PISP sends a request. The bank checks it against the limits and executes it over Faster Payments, with no new authentication.
- The customer can revoke the consent at any time, from the bank app or with the payee.
Variable recurring payments in numbers (2026)
- Monthly volume: in June 2026, UK banks processed 7.73 million sweeping VRPs out of 40.16 million open banking payments, about one in five. Open banking passed one billion payments in total that month.
- Open banking growth: UK open banking processed 351 million payments in 2025 (+57%), and sweeping VRP volumes nearly doubled (+98%).
- The scheme: UKPI was set up by 31 firms from across the open banking ecosystem. Industry estimates that at least 75% current account coverage is needed for commercial VRP to scale.
- The incumbent: UK Direct Debit hit a record 5 billion transactions in 2025. That is the market VRP is going after.
- Brazil: Pix Automático went live on 16 June 2025 for recurring bills and subscriptions.
Sweeping VRP vs commercial VRP
Sweeping VRP
Sweeping moves money between two accounts owned by the same person: topping up savings, paying down a credit card or an overdraft, repaying a loan. In the UK, the competition authority required the nine largest banks (CMA9) to support it, which is why it already runs at scale.
Commercial VRP (cVRP)
Commercial VRP pays a third party: a utility, a telecom operator, a charity, later an online shop. It is not mandated, so it needs a commercial scheme with shared rules, pricing and dispute handling. That is the role of UKPI. Wave 1 covers utilities, financial services and payments to local and central government, sectors chosen for low fraud risk. E-commerce belongs to a second wave: UK Finance has proposed a commercial model for it, but no launch date was confirmed as of October 2026.
The FCA plans to consult on a long-term regulatory framework for open banking by the end of 2026, subject to new powers from Parliament.
Beyond the UK
Brazil’s Pix Automático follows the same logic: one authorization, then automatic payments on the due date. In the EU there is no VRP equivalent yet. The SEPA Payment Account Access scheme, designed to carry premium open banking services, had five asset brokers and no asset holders registered in November 2025, and its workplan was put on hold until a stable text of the Payment Services Regulation, part of the PSD3 package, is available.
VRP: what changes for PSPs, PayFacs and platforms
Authorization and declines
A VRP payment is checked against the consent before it leaves the bank. A charge above the per-payment or monthly limit is rejected, so billing logic must know the limits, warn the customer and ask for a new consent when usage grows. Expired or revoked consents replace expired cards as the main cause of failed renewals.
Cost and settlement
With no interchange and settlement in seconds over instant payment rails, VRP can cut collection costs and free up cash flow. In Wave 1, the payment initiation provider pays the customer’s bank an access fee on each transaction, an interim model that applies until new legislation or July 2027 at the latest.
Disputes and refunds
There is no card chargeback. According to a June 2026 legal briefing on the launch, consumer safeguards and dispute processes are intended to be built into the model from the outset. Platforms need a clear refund flow (a push payment back to the customer) and records of each consent and payment.
Reconciliation and payouts
Each VRP payment is a separate instant transfer with its own reference and an immediate status. Ledgers can be updated payment by payment instead of waiting days for direct debit reports, and platforms that split funds between sub-merchants can trigger payouts as soon as the collection is confirmed.
Onboarding and eligibility
In Wave 1, only certain sectors can use commercial VRP. PayFacs and platforms must check that each sub-merchant’s activity is eligible, and work with a licensed PISP or hold a PISP license themselves.
Routing and fallback
Few merchants will run VRP alone. A subscriber may pay by VRP, card or direct debit, and a failed VRP may need to fall back to another method. Managing these methods side by side, with one view of consent status and success rates, is a job for payment orchestration.
NORBr provides the white-label payment infrastructure to route, onboard, pay out and analyze, under your own brand.
Are variable recurring payments worth it in 2026?
In the UK, yes, for billers in Wave 1 sectors: lower costs than cards, instant settlement and customer-controlled limits. For e-commerce, it is a 2027 topic that is worth preparing now. Outside the UK and Brazil, VRP is still a concept, so PSPs serving EU merchants should follow the PSD3 and PSR timeline before investing.
Frequently Asked Questions
What is a variable recurring payment (VRP)?
A VRP is an open banking payment where the customer gives one consent, in their banking app, for a provider to make repeated payments of varying amounts to a payee. Each payment must stay within the limits the customer set, and the consent can be revoked at any time.
What is the difference between sweeping VRP and commercial VRP?
Sweeping VRP moves money between accounts owned by the same person, such as topping up savings. Commercial VRP (cVRP) pays a third-party business, such as a utility or a government body. In the UK, cVRP launched in June 2026 under the UKPI scheme.
Is VRP better than direct debit?
VRP settles in seconds, gives the customer limits they control in their bank app, and confirms each payment immediately. Direct debit is batch-based and widely accepted. In 2026, VRP is limited to certain sectors in the UK, while Direct Debit still processes billions of payments a year.
Are variable recurring payments available in the EU?
Not yet. No EU scheme offers VRP to merchants in 2026. The European open banking scheme SPAA has been on hold pending the PSD3 and Payment Services Regulation. Brazil offers a comparable service with Pix Automático.
Can a VRP payment be disputed?
There is no card chargeback for VRP. Protections come from the scheme rules: the UK’s UKPI scheme includes consumer safeguards and a dispute process. The customer can also revoke the consent at any time to stop future payments.
