Building the next chapter of UK payments

Over the last two years the UK has had its ambition clearly laid out in the National Payments Vision: consumers and businesses should have real choice in how they pay, and account-to-account payments should become a ubiquitous option. UK Payments Initiative (UKPI) is turning the existing Open Banking standards framework into a commercial, trusted and scalable payment method to make account-to-account payments a reality for the UK.

In the last six months we have built a company owned by 25 shareholders – including the nine largest banks in the UK and 16 payment initiation service providers (PISPs) – who are committed to making Open Banking use cases gain traction and scale. At our core sits our scheme rulebook – a multi-lateral agreement setting out the governance and commercial details overseeing Open Banking transactions. Our rulebook has provided clarity for both sides of the ecosystem on how transactions should be handled, who communicates to customers and merchants, and where liability lies. Importantly, our pricing framework has provided incentives for both sides of the market to invest in Open Banking recurring payments and transparency for merchants considering investing in relationships with PISPs.

As with any start-up, we began with an achievable scope – building commercial variable recurring payments into everyday use cases, including regulated financial services, utilities, rail journeys, government payments and charity donations. Starting in well-understood sectors with strong existing business-customer relationships has allowed us to support our participants in onboarding to the scheme, refine technical requirements and reporting, while proving the end-to-end capability of this new recurring payment type. This does not represent a lack of ambition for UKPI – I firmly believe that delivery discipline in this early wave will allow us to build the foundation blocks for a much greater account-to-account ecosystem.

The commercial prize for the economy is significant. For businesses who have been relying on direct debits and card on file for decades, Open Banking payments can reduce friction, create more predictable money flows and offer a credible alternative to card-based and direct debit commercial models. For consumers, repeat Open Banking payments offer secure bank-account payments within agreed parameters – more control over who can collect money, how much can be taken and for how long. In the right use cases it can support payments that better fit real-life situations, such as bill charging that can adjust to people’s circumstances.

We are now taking these learnings from our live activity and expanding our proposition into more complex retail environments. The direction is clear: the market wants account-to-account payments to move into everyday commerce – retail, ecommerce, subscriptions and over time, point of sale journeys. A broader set of uses introduces more varied risks: goods and services disputes, fulfilment issues, billing errors, fraud and insolvency. Our focus is to build a proportionate model to manage these risks that leans into the existing protections provided by merchants and marketplaces.

We are engaging directly with merchants, participants and regulators to define purchase protection, dispute resolution and pricing. These will all be key determinants of adoption of account-to-account payments from both merchants and consumers. UKPI’s approach is to focus on clear customer journeys and operational reliability then strengthen recognition – trust has to be earned through smooth and resilient user experience.

The UK has an opportunity to create a payments market with more competition, innovation and greater resilience, while giving businesses and consumers more choice. But that will only happen if the industry continues to collaborate with urgency and realism. UKPI’s role is to provide a scheme layer: the rules, standards, commercial model and governance that turns this collaboration into adoption of account-to-account.

We need to build more participants and merchants into the ecosystem by building a commercially compelling product set, underpinned by a credible scheme that is worthy of consumer trust. That is how account-to-account payments will move from vision to everyday use.

UKPI is ready for business

This week we launched UKPI at Money2020 and we are already overseeing live consumer payments. Since our incorporation, we’ve focused on getting the fundamentals right and building the company properly from the ground up. We’ve worked at pace to finalise the scheme rulebook, prepare for the shareholder subscription event, complete testing, and stand up the company’s core structures and capabilities. We now benefit from a committed group of founding shareholders who have provided the long-term funding that will enable UKPI to achieve success

It is particularly encouraging to see the first billers now being onboarded and initial transactions beginning to flow, marking an important milestone in UKPI’s progression from development into active operation.

Welcoming participants

We have also reached an important milestone in transparency. Today, we have published our scheme rulebook on our new website, clearly setting out how UKPI operates and providing a framework that builds trust through defined standards, clear rules, and accountability.

We are now in a position to engage actively with partners and onboard participants. If you are an Account Servicing Payment Service Provider (e.g. bank, building society or e-money account provider) or a Payment Initiating Service Provider, you can join the scheme by signing up to the rulebook.

We are already seeing positive engagement and interest with the use cases set out for Wave 1 – payments to charities, government, utilities and financial services.

A foundation for the future, built together

Reaching this point reflects the significant contribution of our shareholders and early participants, whose commitment, collaboration, and shared ambition have been instrumental in taking UKPI from development through to launch. We can be proud of what we achieved together as an industry.

As we move forward, we are committed to building on this momentum by continuing to foster strong, inclusive collaboration across the industry. As an industry-owned and led company, it is essential that we maintain deep and active engagement with both shareholders and participants, ensuring that UKPI evolves in line with collective needs and priorities. Our ambition is to establish a scalable, resilient, and enduring payment scheme for the UK. One that not only delivers consistently, but adapts alongside the evolving needs of the market, fostering greater competition and enabling ongoing innovation. Our focus is on prioritising and developing the next wave of use cases, while expanding into areas that reflect the broader ambitions of our participants and the wider ecosystem.

Collaborating to build the infrastructure for the next generation of UK payments – Charles Damen and George Miltiadous

By Charles Damen (Token.io; UKPI TPP Constituency Board Director) & George Miltiadous (HSBC; UKPI ASPSP Constituency Board Director)

We’ve spent our careers on different sides of the payments’ ecosystem – George in banking and Charles in payment acceptance – but we share the same conviction: the next era of UK payments will not be built by an institution, it will be delivered by an ecosystem. The UK has a real opportunity to make account-to-account payments work at scale for everyday commerce, and that will only happen if banks, third party providers (TPPs), businesses and regulators align on a common, trusted framework. That’s why we’ve chosen to support UK Payments Initiative and the development of a commercial framework for recurring open banking payments.

In 2023 Joe Garner’s “Future of Payments” report identified the need for greater merchant and consumer choice in UK retail payments. This was followed in 2024 by HM Treasury’s “National Payments Vision” which called for seamless account-to-account payments to be developed as a ubiquitous payment method.

Building on our UK’s strong open banking foundations, clear policy direction and an ecosystem ready to collaborate, the work done by UKPI presents an amazing opportunity to start delivering on these ambitions in a tangible way. In particular, the development of a modern, flexible, and digitally native recurring payments product will help underpin a strong user experience, lower payment costs for businesses and support broad market adoption.

At its core, payments infrastructure is the financial plumbing that enables commerce to take place across the economy. When that infrastructure evolves successfully, it supports businesses, enables new services and helps drive economic growth.

The next phase of open banking

Payments feel innovative when they disappear into the background: simple, reliable and secure. Banks, fintechs, infrastructure providers, regulators and end users (consumers and merchants) all play a role in shaping how money moves through the economy. When those players come together around a shared objective, the result is new payment capabilities that can support innovation at scale.

Open banking has moved beyond its early regulatory phase and, to extend the reach of open banking payments and provide increasing customer choice, enhanced open banking payments can now be delivered by the banks on a commercial basis.

For banks, this shifts the open banking conversation from compliance to innovation. Commercial open banking payments are compelling because they combine customer control with a modern payment experience. Customers can set clear permissions and limits, while benefiting from a flexible yet transparent way to manage recurring payments without the friction of legacy approaches.

This also present an opportunity for banks to support new customer journeys: subscriptions, utilities, repayments and more, while leveraging the UK’s reliable and scalable open banking infrastructure and instant payment rails. Done well, open banking recurring payments can reduce payment friction, improve customer outcomes and help banks enable innovation in a way that is interoperable across the market.

For TPPs, this is core to their business model. The flexibility of UKPI’s modern recurring payment proposition and commercial framework means it can underpin a wealth of different use cases, including “one-click” checkout journeys, flexible instalment repayments, and even physical Point-of-Sale payments.

By bringing the industry together to jointly develop core scheme rules and other shared artefacts (including, for example, a potential trustmark), UKPI is driving development of a payments proposition that merchants will want to offer and that consumers will recognise, trust and adopt.

Collaboration in practice

Financial institutions remain central to the trust, resilience and security that underpin the payments system. As the ecosystem evolves, banks have a responsibility not only to maintain that infrastructure but also to help shape the next generation of payment capabilities.

Collaboration is not theoretical in UKPI. It takes place through regular working sessions between participating institutions. Board representatives meet on a fortnightly basis to work through operational planning, regulatory considerations and the practical design of the scheme itself.

Bringing together perspectives from across banks, fintechs and infrastructure providers helps ensure the framework being developed is robust, commercially sustainable, and capable of supporting the next generation of payment services.

But agreement on the technology alone is not enough. For payments innovation to succeed at scale, trust and cooperation across the industry are essential. Consumers need confidence that new payment methods are secure and reliable. Businesses need confidence that payment capabilities will be widely adopted and interoperable.

The collaboration we are seeing across the UK payments ecosystem today will play an important role in ensuring the UK remains a global leader in payments innovation.

From Principle to Practice: Why UKPI is the crucial test-bed for open finance

Three years ago, TrueLayer argued that the next phase of open banking would not be unlocked by waiting for more regulation, but by banks and fintechs choosing to work together commercially. That argument was rooted in a simple observation: regulation can unlock doors, but only aligned incentives keep them open.

The creation of UK Payments Initiative (UKPI) shows that this future is now moving from principle to practice. UKPI is an independently governed, industry‑owned company formed by 31 firms – including major UK retail banks and fintechs. Its remit is to turn Pay by Bank into a scalable alternative to cards and direct debit, initially by unlocking variable recurring payments (VRP), on commercial terms that work for everyone in the value chain.

This is a shift from today. The original competition basis for open banking prohibits banks from charging third party providers, like TrueLayer, for initiating payments. This ‘free access’ has been a huge boost for competition, reducing barriers to entry for fintechs, resulting in many new products and services being developed for consumers and businesses.

But to unlock new features, UKPI will facilitate bank fees for access. This will enable banks to meet the costs of further developing their open banking APIs, and invest in innovation to improve the customer experience and drive adoption.

As COO at TrueLayer and a board member of UKPI, I see UKPI as the first large‑scale test of a principle that will define the next decade of open finance: if you get the commercial model right, progress follows without the need to regulate and mandate every step.

VRP: The missing functionality for Pay by Bank

Variable recurring payments (VRP) have long been cited as “the next big thing” in open banking, a way to bring instant, account‑to‑account payments to use cases dominated by cards and direct debit. In practice, they’ve been slow to arrive for everyday scenarios like subscriptions, utility bills or ecommerce checkouts.

Today, VRP is limited to sweeping between accounts held by the same person: automating savings, or paying off credit. This is an add-on to the regulatory requirement for banks to provide APIs for payments and data (open banking). Sweeping accounts for more than six million payments every month in the UK; 20% of all Pay by Bank transactions. That is remarkable traction for a product still in its early, policy‑driven phase. It shows that, when the experience is good, adoption follows.

UKPI is designed to take VRP from that policy‑driven phase into a commercial one. UKPI will operate a commercial scheme for recurring payments initially in sectors including utilities, financial services and government, and soon will support much broader use cases, including ecommerce.

Why UK Payments Initiative matters for open finance

The FCA recently published its roadmap for open finance (extending open banking principles beyond banking data, to mortgages, pensions, insurance and beyond). In it, the FCA committed to collaboration with industry ‘on the launch of sustainable commercial schemes’. UKPI is the prototype for this kind of scheme. It will need to crack the economic conundrum of open banking, to demonstrate that commercial schemes are feasible in other sectors.

The problem UKPI is solving

Open banking regulation requires firms to open up their payments functionality to third parties for free, without contracts. This creates hugely positive conditions for market entry (low costs and complexity for entrants), which enables intense competition and innovation, and the development of new services like Pay by Bank which benefit consumers and businesses.

However, with this approach, the firms enabling the access via mandated APIs have fewer positive incentives. They must maintain the API to comply. The API is a cost centre and is viewed as such. This isn’t always the case (NatWest, for example, has created ‘Bank of APIs’ and launched its own successful open banking offering) but there is an acknowledgement, including from regulators, that an economically sustainable phase of open banking is needed to allow (and motivate) the ecosystem to scale.

The commercial model being progressed by UKPI will enable firms to charge a fee for access to payments functionality, allowing them to meet ongoing costs and potentially profit from the service, which becomes a product offering to invest in rather than a compliance exercise. A better service increases adoption and creates a positive flywheel: better product, more users, more income.

However, if the fee is too high, the open banking providers paying the fee will struggle to sell their services to businesses who want to use open banking payments. Volumes will decrease, and firms charging for access will get less fee income.

UKPI has been equipped with strong tools to take on this economic challenge. It has an independent pricing committee and has benefitted from extensive input from Frontier Economics on the optimum pricing model for its initial roll-out of variable recurring payments, summarised in this paper.

How the market reacts to the model, and how UKPI manages the reaction, will be the first true test. It’s an exciting and important time where we are truly putting principle into practice.

Payments have always been risky: why UKPI is reducing the risk

Open Banking has laid the foundations for secure account-to-account payments, with adoption accelerating rapidly, and successful payments increasing by 53% year on year in 2025, according to the FCA (2025 figures: source FCA).

It has also delivered significant security benefits, including the ability to verify account details and approve payments directly through a familiar banking app, all within a trusted framework of regulated providers. As a result, fraud rates for Open Banking payments are significantly lower than the industry average, according to Open Banking (source Open Banking).

The risk will continue to reduce as UK Payment Initiative’s new form of recurring payments – ‘commercial variable recurring payments’ – becomes a more normal way of paying, because the riskiest moment in any transaction becomes less frequent.

There will always be a point of risk in any payment, and it is in that moment of trust that you ask yourself, should I pay?

These new recurring payments improve this in three key ways.

First, as with Open Banking, you do not hand over any payment details. No account numbers, no card details. Instead, you are directed to your banking app to approve the payment. With the new recurring payments, you approve a trusted organisation to take payments from your account. Your bank verifies that organisation as part of the Open Banking network before allowing anything to proceed.

Second, once everything is set up, there is nothing more for you to do. The risk at the point of payment is removed, with your bank and the supplier’s payment provider handling the process securely in the background.

Third, you can set clear guardrails around these recurring payments. You can control the size of individual transactions, cap how much a supplier can take each month, and withdraw authorisation instantly within your banking app.

There will never be a completely risk-free payment. However, this type of recurring payment reduces risk further, allowing you to focus on the more important question in any buyer relationship: do you trust the supplier to deliver, rather than whether the payment mechanism itself is safe.

Update on UKPI and the Delivery of Commercial Variable Recurring Payments (cVRPs)

I’m proud to lead the team establishing UKPI and helping to bring cVRPs from concept into operation. UKPI is now moving into delivery, expanding the types of payments consumers can make when using open banking. By establishing a commercial framework that fairly rewards ASPSPs and a rulebook that standardises the customer experience, we are creating the foundations for a sustainable and scalable future for open banking payments.

This is a significant industry effort, and it’s essential that we demonstrate clearly and credibly that the ecosystem is able to deliver. Our focus has been on building the governance, commercial, operational, and technical foundations required for a stable and scalable cVRP capability – and ensuring that firms across the ecosystem can adopt it in a controlled and responsible way.

Turning the vision for cVRPs into delivery

cVRPs represent an important step towards a more innovative, competitive, and user‑focused UK payments ecosystem. Over the past two years, we have moved from concept to a fully operational model – with UKPI now established and ready to support adoption across participating firms.

We have delivered four core foundations that give the ecosystem the stability and clarity required for a controlled and credible rollout:

• A robust governance framework

The Multi-Lateral Agreement (MLA) now sets out the operational rules, dispute mechanisms, and clear responsibilities for all participants. This provides the certainty and transparency required for consistent and safe participation.

• A commercial model that supports early adoption

The Phase 1/Wave 1 centralised access‑fee structure reduces barriers to entry and provides a sustainable foundation for early ecosystem growth. It also creates a pathway towards a future Phase 2/Wave 2 model designed for more complex e-commerce use cases.

• Technical and operational alignment

Firms are now working to common expectations across standardised APIs, onboarding processes, assurance requirements, and service levels. This alignment is essential for interoperability, reliability, and the user trust required for cVRP adoption.

• Strong industry mobilisation

Extensive collaboration with ASPSPs and PISPs has shaped the customer experience, operational requirements, and delivery roadmap. This engagement has created the critical mass needed for a credible launch and ongoing ecosystem development.

Balancing readiness, assurance, and delivery

We are supporting firms with varying levels of readiness, all while maintaining a high bar for live proving. By structuring delivery in phases, we are able to show clear, measurable steps forward, give firms space to enter when prepared, and preserve the discipline required to build a robust and reliable cVRP ecosystem. This balance is not theoretical – we are achieving it in practice as Stage 1 mobilises.

Stage 1: Controlled rollout to build confidence

Stage 1 – beginning with a significant number of ASPSPs and TPPs – provides a controlled environment to test real‑world journeys and validate the end‑to‑end ecosystem ahead of wider availability.

Over the next six weeks, the number of participants will steadily increase, allowing us to scale the proving environment and demonstrate that the model works consistently across a wider set of firms. This period represents a critical step building towards readiness for broader, production‑level availability.

Participants will enter as they become ready, allowing steady progression across the ecosystem without compromising assurance. Controlled access, capped volumes, and defined usage parameters ensure testing remains structured and reflective of production conditions.

A foundation for the future

By the end of this six‑week window, we will have the assurance and evidence required to progress toward wider rollout and enable firms to begin planning for meaningful customer adoption.

With UKPI established and Stage 1 underway, the transition from planning to delivery is firmly in progress. cVRPs will enable new forms of recurring and automated payments, provide users with greater control, and support more efficient payment models for businesses.

Our focus remains on delivering a stable, safe, and scalable capability – and demonstrating that the industry is prepared to operationalise cVRPs in a controlled and responsible manner.

What is UK Payments Initiative all about?

The UK needs a better model for recurring payments

Recurring payments underpin a huge part of the modern economy. Utility bills, subscriptions, memberships, account top-ups and digital services all rely on payments that happen automatically in the background.

Yet much of the infrastructure behind them was designed for a different era.

Today most recurring payments rely on direct debits or card-on-file payments. Both have served the market well, but they also come with limitations. Direct debits can be slow and inflexible, while card-based payments often offer limited transparency for consumers and can be expensive for businesses.

This is why the industry has been developing variable recurring payments, using existing open banking technology.

At UK Payments Initiative we are working with industry partners to create a commercial framework that enables this capability to scale across the UK payments ecosystem.

The concept is straightforward. Instead of giving a company open-ended access to take payments from an account, a customer can grant permission within defined limits. For example, allowing payments up to a certain value within a set timeframe.

It is a simple change, but an important distinction from both direct debits and card-on-file.

It introduces clearer control and visibility for consumers while maintaining the convenience of automated and one-click payments. For businesses it offers faster confirmation of payments and infrastructure that is designed for the digital, real-time economy.

This matters because the nature of commerce is changing.

We are moving steadily towards an economy where more services are delivered continuously rather than through one-off transactions. At the same time, digital platforms and automated services are increasingly able to act on behalf of customers.

In that environment, payment systems need to support flexible and controlled ways of moving money. A model based on clear permissions and defined limits is far better suited to that future.

The National Payments Vision

There is also a broader infrastructure point. Payments are a critical part of the UK’s economic infrastructure. When payment systems fail, the consequences are immediate.

The UK’s National Payments Vision (NPV) sets out an ambitious goal: building a trusted, world‑leading payments ecosystem powered by resilient infrastructure and clear regulatory foundations.

UK Payments Initiative is introducing a new way to collect repeat payments, within consumer-defined limits, giving businesses and banks a modern, interoperable alternative to legacy collection methods. This boosts resilience by providing a new network for payments to run through and rely on.

Ensuring that infrastructure evolves alongside the digital economy is essential if the UK is to remain a leader in payments innovation.

Next steps

UK Payments Initiative is now entering the next phase of development, focusing on application to real-world recurring payment use cases including:

Regulated financial services – paying into your pension, mortgage or investments
Utilities – paying your electricity, gas, water or phone bill
Local and central government
Charities – making donations or payments
Rail – buying a ticket

Further down the line, UK Payments Initiative will be looking at applications in e‑commerce and even physical point‑of‑sale. Watch this space for future announcements!