VRP (variable recurring payment) is a new Open Banking payment method that allows recurring payments of variable amounts from a bank account. It offers benefits over direct debit like faster settlement and more payment flexibility. VRP can be used for sweeping funds between accounts, subscription payments, bill payments, and more. While initially mandated only for sweeping, VRP has the potential for many other use cases that could generate new revenue streams. Ecosystem players should explore commercial opportunities and work together to develop VRP standards and address risks.

1. Variable
Recurring
Payments

2. Introduction to variable recurring payment
 Variable recurring payment is the latest development in Open Banking in the UK: an innovative way to initiate recurring payments securely. It uses an Open Banking
API framework to give merchants and other businesses a faster, cost-effective alternative to direct debit or card-on-file transactions.
 VRP is similar in concept to direct debit payments, but it facilitates a faster movement of funds (direct debit has a 3-day working cycle).
 As a result, VRP can offer more compelling payments propositions for businesses and consumers to seamlessly set up and execute recurring payments
What is VRP?
At this stage the Competition & Market Authority (CMA) in the UK has mandated VRP only to the extent that it will support sweeping of funds to enable
competition, encourage better savings for customers and facilitate current account switching.
However, VRP can be applied to a wide range of payment contexts. Some are outlined below.
Where can VRP be used?
Automate the movement of money
between accounts held by the same
personal or business customer to
enable savings, investments or loan
repayments.
B2B PAYMENTS
Make it easy for business banking
customers to pay staff and suppliers or for
government services (e.g. tax).
SUBSCRIPTION PAYMENTS
Enable one-off or repeat personal or
business payments (e.g. utilities,
memberships, donations, etc) where the
amounts might vary each time.
PEER-TO-PEER PAYMENTS
Enable peer-to-peer payments (e.g. bill
splitting, family allowances, etc)
potentially including integration with
online wallet(s).
RETAIL PAYMENTS
Facilitate one-click payments to online
merchants (including split and/or
delayed payments) and/or point of sale
in-store payments.
SWEEPING
Regulatory Scope Potential Premium Use Cases of VRP

3. Evolution of the Open Banking Payments offering
The Open Banking Payments offering has evolved continuously since its inception to cater for consumer needs in different types of payments scenarios. VRP, the latest
addition to this offering, addresses the current gap in merchants’ and other businesses’ recurring payments solutions.
Single
Immediate
Payment
Domestic
Scheduled
Payment
Domestic
Standing
Order
Variable
Recurring
Payment
Allows customers to
initiate a one-off
payment of a specific
amount to a specific
payee
Enables a one-off
payment of a specific
amount to a specific
payee on a specific
future date
Initiates a series of payments of
a specific amount to a specific
payee on a number of
specified future dates or on a
regular basis
Allow customers to make a
series of payments of
variable amounts to a
specific payee over a
period of time
Q4 2017
KEY
FEATURES
AVAILABLE
FROM (YEAR)
AVAILABLE FROM
API VERSION
Q3 2018 Q3 2018 Q4 2021- 2022
OBIE R/W API* V1.0 OBIE R/W API V3.0 OBIE R/W API V3.0 OBIE R/W API V3.1.8

4. AVOID OVERHEAD OF CARD
DATA MANAGEMENT
What are the key benefits of VRP for consumers?
VRP can enable sweeping, for
which direct debit is not
designed.
VRP’s ability to sweep money
across own accounts in a faster
and secure way enables customers
to avoid overdraft fees or charges
when their balance goes down in
one account; to move surplus funds
to savings or investment products
to effectively manage personal
finances; to split regular bills with
friends or families seamlessly and
instantly – the possibilities are
unlimited.
 VRPs will allow customers to make recurring payments directly from their bank accounts using Open Banking APIs.
 Customers have the control and flexibility to set up the maximum limits of the overall transaction as well as of every single transaction, using the VRP
consent parameters.
 Once VRP is set up, further authentication for VRP payment initiation may or may not be required. This simplifies the customer experience with regard
to managing and executing recurring payments.
VRP helps to minimize manual
errors in setting up payments
instructions. This can often happen
when creating direct debit
mandates or storing card data on
merchant systems, which requires
manual data entry.
The Open Banking framework
enables customers to set up
VRP consent with control
parameters to allow third parties
(TPPs) to initiate VRP payments
from the customer’s bank account.
Customers can cancel VRP
consent at any time from the
TPP or bank interfaces. As a
result, customers can enjoy greater
security and control over their
outgoing payments and avoid
scenarios such as setting up a
card-on-file and forgetting .
When making recurring payments
with VRP, customers will no longer
be required to provide debit or
credit card information or keep
them up-to-date when their card
expires or is lost. Customers can
set up their bank account details
and have convenience and control
over their outgoing payments.
SMART FINANCIAL
MANAGEMENT
INCREASED SECURITY &
CONTROL
AVOID MANUAL ERROR

5. What are the key benefits of VRP for merchants?
For merchants and other businesses, VRP has the potential to offer several benefits by addressing key gaps in the market. Current recurring payments solutions – such
as standing orders, direct debits or card-on-file – have longer settlement cycles and mandate set-up times. VRP offers quicker consent set-up and enables direct
transfer from the customer’s bank account, which means the merchant gets paid immediately.
Some of the key benefits businesses can enjoy by offering VRP to their customers:
VRP offers a cost-effective alternative to
card payments. Businesses can save the
costs associated with interchange fees,
chargebacks, fraud losses and compliance
overheads (i.e. PCI DSS*).
REDUCED COST OF PAYMENT
PROCESSING
BETTER CASHFLOW
MANAGEMENT
Unlike direct debit (3-day working cycle)
and card payments (3-5 business days
working cycle), VRP enables fast
money movement directly from the
customer’s bank account. This means
merchants can benefit from faster
settlement and better cashflow.
As VRP eliminates the need to store
sensitive data such as card information,
businesses can avoid any security risks
and risk of data breaches by adopting
VRP.
ENHANCED SECURITY

6. 2
Regulatory outlook in the UK
VRP will allow authorised payment initiation service provider (PISPs) to initiate a series of regular
payments on behalf of their customers using the customer’s long-held consent, also known as
‘VRP consent’ or ‘sweeping consent’. According to the standards published by OBIE, VRPs can fall
into 2 categories:
The OBIE standard sets out the ‘VRP
consent’ or ‘sweeping consent‘ parameters
which will be agreed between the customer
and its PISPs.
This will includes the following:
 Payee account name
 Payee account identification (sort code,
account number, international bank
account number, etc.)
 Maximum amount per payment & currency
 Maximum amount per timeframe of the
VRP (i.e. weekly, monthly etc.)
 Expiry date (ongoing or specific date)
For this type of VRP, customers will need to provide explicit consent for each payment instruction
under the VRP consent. This will provide the flexibility to dynamically link the amount and a payee
for the payment transaction, ensuring security of the transaction. The customer journey for VRPs
with delegated SCA will be slightly different from that with SCA exemption. A PISP will initiate
variable recurring payment(s) within the agreed set of VRP consent parameter(s), which will result
in a single domestic payment being processed by the ASPSPs as a single immediate payment
(SIP) via faster payments. Unlike the SCA exemption journey, the customer is required to be in
session for each VRP payment(s). The customer must specify the payee and undergo SCA (either
delegated SCA by the PISP or a third party, or SCA at the ASPSP). (journey slide 8)
VRPs with delegated SCA
For this type of VRP, customers will need to authorise VRP consent at their account servicing
payment service providers or ASPSPs (i.e. banks or payments service providers) using strong
customer authentication (SCA) when setting a new VRP. Subsequent regular payments
instructions using the VRP consent will then not require further SCA. ASPSP will apply necessary
SCA exemption (trusted beneficiary or transfer to self) to facilitate VRP payments. (journey slide 7)
VRPs with SCA exemption
1
VRP Consent
VRP
Control
Parameters

7. The customer journey for VRP with SCA exemption
Source: OBIE Customer Experience Guideline
Consent set-up
SCA exempt VRP execution
PISP PISP
ASPSP
PISP ASPSP
CoF* Request
from PISP
1
Response
from ASPSP
PISP ASPSP PISP

8. The customer journey for VRP with delegated SCA
Source: OBIE Customer Experience Guideline
PISP PISP
ASPSP
VRP execution
Consent set-up
PISP ASPSP
CoF Request
from PISP
4
Response
from ASPSP
PISP ASPSP PISP

9. The regulatory scope of VRP for sweeping
Source: https://assets.publishing.service.gov.uk/media/622ef71fd3bf7f5a86be8fa4/Sweeping_clarification_letter_to_be_sent_14_March_2022__.pdf
https://assets.publishing.service.gov.uk/media/6192453fe90e07044a559c02/Letter_approving_VRP_proposal_21_10_10_.pdf
The Competition & Market Authority (CMA) in the UK recently clarified the scope of VRP to enable sweeping use cases only to meet the CMA’s original objectives outlined
in the retail banking market investigation. Under this mandate, the CMA9 banks (9 large banks in the UK and Northern Ireland) will be required to implement Open Banking
VRP APIs by July 2022. The regulatory scope of VRP implementation in the UK is outlined below:
 Sweeping funds between current account providers, including fund movement to
avoid overdrafts.
 Sweeping to destination accounts which are used for unbundling overdrafts from
a current account and other alternative forms of credit that closely compete with
overdrafts.
 Sweeping to destination accounts which are used for loan repayments as part of
a service that provides alternative forms of credit to an overdraft.
 Sweeping to a credit card account.
 Sweeping to cash savings accounts that are capable of paying interest.
 To support the CMA’s objective for VRP to enable sweeping, e-money accounts
where they are used by customers and SMEs as a substitute for current account
is in scope.
 Sweeping to make e-commerce purchases, including
purchasing goods & services directly or through a
'me-to-me’ business account.
 Sweeping to destination accounts used for the
purchase of cryptocurrency and other similar assets.
 Sweeping in order to use online gaming and gambling
services.
 Sweeping to destination accounts used for foreign
exchange or international money transfer services.
 Investment products.
Sweeping Use Cases In Scope: Sweeping Use Cases Out of Scope:

10. What does it mean for ecosystem players?
 While the CMA mandate focuses on a minimum set of sweeping use cases, we believe this is a step in the right direction. VRP is the next logical offering in the
Open Banking payment suite. With its potential to enable innovative embedded finance use cases across multiple industry verticals, VRP can
accelerate the move to Open Finance.
 Ecosystem players should approach VRP as a competitive opportunity rather than a compliance exercise. Payments service providers that implement VRP for
compliance should explore the untapped VRP use cases as part of their premium API offering to generate new revenue.
 Consider commercial VRP opportunities right away. By introducing sweeping functionality, payment service providers are creating infrastructure that could
be used for much more. Without a competitive offering, sweeping use cases open up the possibility of money moving out of their customers’ accounts into other
banks or building societies. In an increasingly competitive market, this could be an opportunity for challengers to take a greater share of customer savings.
 View VRP as the critical enabler of Open Banking payments. It could be the first opportunity for players to monetise their Open Banking investment and
provide balance to the Open Banking ecosystem. To unlock its full potential, it is essential that TPPs and banks work together to build on functionality and deliver
propositions that will improve financial wellbeing and fulfil the promise of real-time payments everywhere.
 Engage with your ecosystem partners to address a risk & liability model for these use cases. Consumer protection for VRP-enabled use cases must be
considered and agreed across different parties as VRP comes without the standard protection of direct debit guarantees or chargebacks. It is within the
competitive space of banks and PISPs to define and agree the risk and liability models for different VRP use cases. For example, if using VRP in an e-commerce
scenario, what liabilities will be shared by different parties if goods or services are not received by the customer?
 Define a pricing approach for premium VRP use cases based on potential and risk/liability assessment. Pricing will be key to differentiate VRP propositions
and drive their adoption.
Key considerations for ecosystem players

11. The path forward
VRP for sweeping is just the starting point for better financial management use cases. Providers can enable a range of savings and smart credit propositions leveraging
VRP within the current scope of regulatory mandates.
USE CASES DESCRIPTIONS
Sweeping
(currently
mandated)
Savings
 Enable a smoother PFM experience – send money from one account to another
 Manage business cash flows – monitor business current account and enable money to be swept over whenever the balance
amount (take advantage of interest rates)
Overdrafts  Enable smart overdraft – pay off the outstanding balance in one account using another and prevent overdrafts
However, VRP opens up a number of premium use cases (beyond the regulatory mandates) which providers can monetise to generate new revenue streams.
USE CASES DESCRIPTIONS
Non-sweeping
(premium use
cases)
E-commerce
 Manage subscriptions – consumers can easily pay for their various and increasing number of subscriptions
 Direct checkout payments to online merchants and point of sale in-store payments
 Embedded finance – enable smoother in-app purchases (e.g., Uber)
Bill management
 Regular household bills (e.g., utilities)
 Peer-to-peer payments (e.g., bill splitting)
B2B transactions
 Make it easier and more efficient for businesses to pay repeated transaction (e.g., salaries, tax, suppliers)
 Potentially cheaper cross-border payments
 Easily manage enterprise and corporate IT subscription such as cloud services
Others
 Bulk payments – future opportunity for customers to issue multiple payments to different payees from personal accounts
 Payments from devices, machine-to-machine payments (enabled by IoT)
 Secured lending

12. VRP can transform B2B & e-commerce
subscription payments
Note: (1) Others mainly include video streaming, music streaming and other areas such as gaming, fitness, financials, news etc.
Source: UBS, PYMNTS Optimizing Subscription Payments September 2021 report, n=2,195, Accenture analysis
VRP addresses one key gap in the Open Banking payment offering: subscription payments. This is impeding different types of businesses which rely on wider adoption of
subscription payment. Many rely on the card-on-file option to accept subscription payments.
The subscription
payments market in
Europe is expected to
be worth $315bn by
2025
225
292
133
650
687
536
277
1,500
Total
E-
commerce
Others
Cloud
2020 2025
GLOBAL MARKET SIZE OF DIGITAL SUBSCRIPTION ECONOMY
USD billions, 2020 vs 2025
TOTAL MARKET CAGR: 18%
53%
21%
14%
12%
US
Europe
Mainland China
Rest of the world
MARKET SHARE OF DIGITAL SUBSCRIPTION MARKET IN 2025
Shares of subscriptions company
• Subscription
economy is one of
the fastest-growing
segments globally,
driven by rapid
growth in e-
commerce
• Other drivers:
– Proliferation of
IoT devices
– Gains in
computing and
storage
– 5G uptake
Size for European
market is expected
to be USD 315 bn
in 2025
Cards are the
preferred method for
subscription payments

13. VRP can drive a shift towards account-on-file in
the subscription payments market
Banks and payments
service providers should
consider the competitive
values of VRP to go
beyond the regulatory
mandate and deliver more
compelling payments
propositions for their
customers.
VRP can shift the subscription payments market from traditional card-on-file towards account-on-file,
bringing multiple benefits for merchants
Merchants relying on card payments for
subscriptions can significantly reduce
the cost of payments processing by
switching to VRP.
COST REDUCTION
Merchants will no longer bother about
customer churn on expiry of card-on-
file or in the event that a customer’s
card is lost or stolen.
LOWER CUSTOMER
CHURN
With no need to store or manage card
data, merchants can eliminate the
burden of compliance and card fraud
losses.
ENHANCED SECURITY
VRP enables merchants to get paid
almost instantly from the customer’s
bank account, unlike direct debit or
cards which have longer settlement
cycles.
BETTER LIQUIDITY
Benefits of a VRP-enabled account-on-file proposition for merchants

14. Learn how Accenture can help
your organization identify and
seize growth opportunities in
Payments and Open Banking.
Sulabh Agarwal
Global Payments Lead
Managing Director, London
LinkedIn
Sudipta Kundu
Payments SMA
Senior Manager, London
LinkedIn
Amit Mallick
Global Open Banking Lead
Managing Director, London
LinkedIn
Download our Growth in Payments report:
Our research highlights how payments leaders
outgrow the competition in the face of disruption
and evolving customer needs.
Read our Banking Blog for latest insights,
including posts on:
• Will UK expand Open Banking payments using new
VRP?
• The ultimate guide to banking in the metaverse
• Can banks grab the buy now, pay later opportunity?
Additional Contributors:
Shauna McLean
Manager, London
LinkedIn
Yik Chi Tan
Analyst, London
LinkedIn

15. Variable Recurring Payments
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