UK Finance, supported by Deloitte, has published a proposal for a commercial model for ‘Wave 2’ commercial variable recurring payments (cVRPs), such as ecommerce use cases.
The proposal sets out a commercial model, including the fee structure, as well as purchase protection options, and model outcomes showing how “core assumptions impact the level of the transaction fee”.
The commercial model for ‘Wave 1’ use cases, which are defined as “low-risk”, including payments to regulated financial services, regulated utilities sectors, and local and central government, has already been proposed by Open Banking Limited.
UK Finance, along with Deloitte, said that ‘Wave 2’ cVRPs, namely cVRPs for ecommerce use cases, “could generate a significant volume of payments”.
With respect to the fee structure, UK Finance has suggested that “a multilateral centrally set transaction fee, set by any operator, should be paid by the PISP, and received by the consumer’s ASPSP for each successful transaction”, and that any operator should be able to modify the commercial model in future in consultation with industry.
It also concludes that one of two high-level options is used as the basis for the purchase protection model for cVRP – debit card efficient or Open Banking Single Immediate Payments (SIPs), or SIP+.
Under the SIP+ model, consumers would not be able to access purchase protection from their ASPSP, “except in the event of merchant failure”, but consumers would continue to benefit from existing legal frameworks – for example, protection from fraud.
Under the ‘debit card efficient’ model, UK Finance has said consumers would be able to access purchase protection from their ASPSP, similar to debit card purchase protections, with liability held by PISPs.
“These protections would need to be designed so that they reduce the costs to merchants of purchase protection compared with debit cards,” UK Finance stated.
Robert Driver, principal, payments, innovation and resilience at UK Finance, said: “cVRP is an exciting payment product, and a landscape of market participants is developing to make it available to businesses and consumers.
“At the end of last year, UK Payments Initiative Ltd incorporated. We have shared the report with them as an input into their decisions on the Wave 2 cVRP commercial model. Other operators and/or stakeholders will consider it too.”
He added: “2026 will be an exciting year for Open Banking and one in which we will see the first cVRP transactions. UK Finance is pleased to have worked with members and other stakeholders to support a milestone development in Open Banking.”
Further reading: UK Open Banking payments ecosystem: New cVRP scheme is ‘welcome step’
