What Is cVRP? The New Open Banking Payment Method Set to Replace Direct Debit for Some Bills

UK open banking hit another record in June 2026, with the ecosystem recording 2.81 billion API calls, up 4.4% month on month and the highest monthly volume to date. Behind that headline number sits a quieter but potentially more consumer-relevant development: the rollout of commercial variable recurring payments, or cVRP — a new way to pay recurring bills that could eventually challenge Direct Debit's decades-long dominance.

What cVRP actually is

Variable recurring payments let you authorise a company to take payments directly from your bank account, with limits you set in advance (a maximum amount and frequency), without handing over card details or setting up a traditional Direct Debit mandate. The "commercial" version — cVRP — extends this beyond the sweeping/switching use cases it started with (like moving money between your own accounts) to genuine commercial relationships: paying utility bills, subscriptions, or instalment plans directly from your bank account via open banking rails. The payments industry has broadly welcomed the new cVRP scheme as a meaningful step toward a more open, bank-account-based payments ecosystem.

Why it matters compared with Direct Debit and cards

Direct Debit has been the default for recurring UK bill payments for decades, backed by the Direct Debit Guarantee, which protects you if a payment is taken in error. Card payments, meanwhile, involve card networks and processing fees that businesses often pass on in pricing. cVRP payments move money directly between bank accounts using open banking APIs, which can mean lower processing costs for businesses (potentially passed on as better prices) and, for consumers, payments that only occur when authorised limits are respected — you set the maximum amount and frequency up front, and the payment can't exceed what you've agreed to.

Open banking payments overall reached 40.16 million in June 2026, with variable recurring payments specifically growing 6.7% month on month — a sign that adoption, while still a fraction of Direct Debit's scale, is accelerating.

The regulatory backdrop

This growth sits on top of a firmer legal foundation than open banking has had before. The Data (Use and Access) Act 2025 embeds open banking within the UK's new "smart data" framework, giving it statutory footing beyond the industry agreements that underpinned it previously. HM Treasury is expected to grant the FCA new rule-making powers over open banking in 2026, and the FCA plans to consult on a long-term regulatory framework before the end of the year.

Checklist: should you switch a bill to cVRP?

• Check whether your bank and the biller both support cVRP yet — availability is still expanding and not universal.
• Compare the protections on offer — cVRP doesn't currently carry an equivalent to the Direct Debit Guarantee, so understand what recourse you'd have if something goes wrong before switching.
• Confirm the maximum payment amount and frequency you're authorising, since this is meant to give you more control than a traditional Direct Debit mandate.
• If a biller offers a discount for switching to cVRP or open banking payment, weigh that against your comfort with a newer payment method.
• Keep using Direct Debit for now if you value its long-established guarantee and your biller doesn't yet offer a clearly better cVRP alternative.

How this compares internationally

Similar account-to-account payment infrastructure is developing elsewhere. In the EU, the instant payments regulation and PSD3/PSR reforms are pushing toward comparable account-to-account payment capabilities, while Australia's Consumer Data Right is building analogous open banking payment initiation features, though the UK — having launched open banking earliest, in 2018 — remains ahead in real-world payment volumes.

Key Numbers

• Open banking API calls, June 2026: 2.81 billion (record high)
• Open banking payments, June 2026: 40.16 million
• Variable recurring payments growth: +6.7% month on month
• UK open banking users: around 17 million (roughly 1 in 3 adults)

Sources

• The state of open banking payments in the UK in 2026 — The Payments Association
• UK Open Banking payments ecosystem: New cVRP scheme is 'welcome step' — Open Banking Expo
• A Landmark Year for Open Banking — Open Banking Ltd
• European Commission — instant payments and PSD3

Educational content only — not financial advice.