Open Banking Limited (OBL) has revealed that 31 organisations from across Open Banking and payments have committed to fund the creation of a new company that will take forward the initial phase of commercial variable recurring payments (cVRP).
The new entity will be wholly owned and run by industry, while OBL said that a decision on ongoing funding for the entity will be made after the initial phase of work.
Among the organisations that have agreed to fund the establishment of the independent operator are fintechs, high street banks, challenger banks and payment providers, including Acquired.com, GoCardless, Nationwide, Mastercard Open Banking Services UK, Token.io, obconnect, NatWest Group, Moneyhub, Plaid, Yapily and TrueLayer.
The proposed initial use cases for cVRPs will focus on selected regulated industries, such as payments to utility and rail companies, regulated financial firms, e-money institutions, government bodies, and charities.
According to OBL, cVRPs in these areas will give consumers better control over regular payments, as well as a frictionless payment experience when buying goods or services from websites.
Henk Van Hulle, chief executive officer of Open Banking Limited
Henk Van Hulle, chief executive officer of Open Banking Limited, said: “This is a significant moment for the industry, and I sincerely thank the organisations that have committed to fund efforts to create a company that will carry forward the important work on cVRPs.
“It is testament to the collaborative nature of our ecosystem that it can be industry-led.”
He added: “As a collective industry, we will continue to harness the commercial opportunities that lie before us, giving greater choice to our citizens and businesses, as well as delivering wider economic growth.”
The latest official figures from OBL showed that, in March, consumers and businesses made 27.21 million Open Banking-powered payments – of this total, 3.67 million were VRPs.
Industry reaction
Tom Burton, director of external affairs and public policy at GoCardless, called it “a giant step forward”.
“The industry has put its money where its mouth is and, with the backing of over 30 organisations, is creating a new operator body to drive the launch of commercial VRPs,” he said.
“It means we’re on track to introduce these payments to financial services firms, utilities providers, charities and other ‘first wave’ sectors later this year, bringing us that much closer to delivering more competition, innovation and consumer choice to UK customers.”
Francesco Simoneschi, chief executive officer of TrueLayer, said: “The Government’s National Payments Vision set a bold ambition for Pay by Bank to become ‘ubiquitous’, and today, the industry is answering that call.
“By uniting to fund a scheme operator, we’re laying the groundwork for Pay by Bank to power everything from utility bills and subscriptions, to one-click checkouts and even in-store payments. This marks the beginning of a more open, competitive and frictionless future for UK payments.”
Further reading: FCA, PSR reveal plans for new independent company to drive VRP in the UK
