Commercial VRPs: The new card-on-file?

Open banking is evolving how we pay and get paid, and it's time to talk about what's next. While card payments still dominate, their flaws – high fees, frustrating failures, and risk of fraud – remain costly for both businesses and their customers.

Enter Commercial Variable Recurring Payments (cVRPs), the breakthrough payment method built on open banking that's set to transform recurring revenue. 

We've been pioneering Variable Recurring Payments (VRPs) since we processed the world's first VRP transaction in 2019. This expertise is already giving financial services businesses, like Yonder, the speed and security of account-to-account payments to offer customers more flexibility with their credit card repayments.

Now, we're looking forward to the wider rollout of this “bank-account-on-file” model in a commercial setting, with commercial Variable Recurring Payments (cVRPs).

What are cVRPs?

cVRPs are a bank payment method that lets businesses automatically collect variable recurring amounts with just a single customer authorisation. 

Unlike ‘sweeping’ VRPs, i.e. transactions made between two accounts owned by the same person, cVRPs enable payments between a customer account and an account owned by a business. This will open up new use cases in more commercial sectors, such as usage-based charges (like energy bills) and flexible payment plans. 

Think of it this way: for cards, when you save a customer's card details – "card on file" – you can charge them a recurring or variable amount. However, this relies on storing sensitive details that can expire and are a target for fraud.

cVRPs will offer the same flexibility but with increased reliability, at a fraction of the cost of cards.

Here's how we predict cVRPs will compare to cards

The benefits of cVRPs for businesses

cVRPs are set to launch for sectors where pricing is complex and variable, but the need for automation is high. This ‘first commercial phase’ or ‘wave one’ includes:

• Energy, utilities and telecommunications (e.g. bills based on usage)

• Regulated financial services (e.g. insurance, investments, pensions, mortgages)

• Public sector services (e.g. council tax, variable parking fees)

• Charities (e.g. variable donation amounts for ongoing campaigns)

• Rail and transport (e.g. season tickets, usage-based travel payments)

Financial control in a variable world

For these types of business, the amount owed by a customer can change every month based on consumption (e.g. megawatts of energy, gigabytes of data, distance travelled). 

Instead of relying on cards with high fees and up to 10-15% risk of payment failure, cVRPs will help give businesses more financial control, with payment confirmation in seconds and a higher chance of payments being successful.

The power of automation

Additionally, the cVRP structure takes the complexity out of variable billing, using bank-to-bank connections that don’t expire, coupled with single payment authorisations (within an agreed limit). This cuts down admin and manual payment chasing, while also reducing the risk of data breaches, card fraud and chargebacks.

The benefits of cVRPs for customers

As well as offering customers more transparency on payment limits, cVRPs are set to have a positive impact on the overall payment experience, too.

Eliminating payment hassle

Take the case of cVRPs for variable utility bills. Since authorisation is linked to a secure bank account (not a card), the chance of failed payments is significantly reduced, when compared to cards which have an expiry date. This removes the hassle of customers needing to update details or call customer service, providing an effortless, automated experience after the one-time set up.

Simpler refunds

If an issue does arise, issuing a refund is simple. Direct bank-to-bank refunds happen the same day, which is significantly faster than waiting weeks for a card chargeback investigation to finish.

Barriers to adoption and the cVRP path forward

While the case for cVRPs is clear, any new payment method must navigate familiar hurdles on its path to mass adoption.

Barriers to adoption

For many businesses, the primary barrier is the perception that integrating a new open banking technology is complex or slow. Or that consumer knowledge of open banking payments is still limited.

The regulatory scheme body that will govern cVRP standards and bank participation is still being established. Once incorporated, banks will begin signing on to support the payment method.

Where we are now

The foundation of open banking is far from theoretical. In fact, open banking in the UK is accelerating, with 15.16 million users reported in July 2025 (nearly one-in-three adults) – marking its fastest growth yet. 

In addition, cVRPs are no longer just a concept, but a unified industry initiative. A coalition of 31 major financial institutions, including GoCardless, Nationwide and Natwest Group, has agreed to jointly fund a new entity to take forward the initial phase of rolling out cVRPs.

Hiroki Takeuchi, co-founder and CEO of GoCardless, said: “In the UK, accepting digital payments often means putting up with high fees because the market is heavily dominated by cards. Commercial VRPs offer merchants a chance to break that strangle-hold and replace card-on-file with ‘bank-account-on-file’. “By committing funds to this new industry initiative for commercial VRPs, we’re doing our bit to deliver the UK’s National Payments Vision for more competition, innovation and choice for businesses and consumers.”

*Source: GoCardless comparison based on a £100 transaction across 6 major UK payment processors, November 2025