Why commercial VRP is a gamechanger for UK payments

It’s been an exciting few weeks for payments, particularly for businesses that collect at scale. The UK Payments Initiative (UKPI) officially launched commercial Variable Recurring Payments (cVRP).

This is an important milestone for Open Banking, for Modulr, and for the broader UK payments industry, introducing a commercially structured framework for an alternative to traditional card-based and direct debit payment models.

It's an industry-led and industry-owned scheme to support a next-generation payment capability. With Modulr as a founding shareholder, we’re pleased to work alongside a varied group of payment providers to bring this to market as we scale our Collections Hub.

A milestone for Open Banking

We’re at a significant moment for the payments industry. Open Banking has been live in the UK since 2018 but has grown rapidly in recent years. By the end of 2025, it reached 16.5mn active user connections in the UK, a 36% year-on-year increase, with payment volumes growing 57% across the year to 351mn transactions. Open Banking is now estimated to process more than 37mn payments per month.

This growth is reflected in our own customer base too. Use of Open Banking payments by our customers has expanded over the past couple of years and now accounts for more than one third of all payments by volume via our Collections Hub.

Modulr has already been working with our customers to introduce VRP, including lenders such as Oakbrook. cVRP now gives us the opportunity to serve more customers across a broader range of use cases.

It’s another strong addition to our Collections Hub, which brings Direct Debit and Open Banking capabilities into one platform to simplify and streamline payments operations, reducing operational burden, and giving a unified view of collection performance.

Changing the game for payments at scale

cVRP means customers set their own consent parameters upfront and can view, amend, or cancel at any time. A single consent covers variable amounts, with no re-authorisation needed when the amount changes.

It addresses the significant challenge of Direct Debit failures for businesses that collect recurring payments – a challenge that has been increasing consecutively for five years.

cVRP has the potential to have a significant impact on both speed and operational efficiency for businesses, particularly those running high-volume recurring collections. It means a reduced operational burden with no manual adjustments, no waiting for a three-day settlement, and a lower failure rate.

Modulr’s focus with our cVRP rollout is aligned with UKPI’s Wave 1 rollout, supporting sectors where variable payments and operational friction are sharpest. You can learn more about eligibility here.

For businesses that depend on recurring collections, the moment to engage is now. If you want to understand what cVRP means for your business, get in touch with our payments experts.