Report

Next steps for commercial variable recurring payments  

24 July 2025
Next steps for commercial variable recurring payments

OBL recently concluded two public consultations that mark a significant step forward in the development of commercial variable recurring payments (cVRPs), a pioneering new payment product, in the UK.  

These consultations focused on the proposed Multilateral Agreement (MLA) and the accompanying commercial model that will underpin the cVRP ecosystem, prepared by independent consultancy Frontier Economics. Together, they aim to create a robust, sustainable, and commercially viable framework for this innovative new way for consumers and businesses to make recurring payments. 

In this report we set out:

  • the feedback we received from stakeholders in detail;
  • the key themes and concerns shared;
  • the all-important next steps in shaping the future of cVRPs.

We remain supportive of both a fast launch and expedited expansion, based on continued industry collaboration and co-operation.  

Read the report

Why we consulted 

The MLA and commercial model underpin the successful rollout of cVRPs. The MLA sets out the legal and operational rules for how participants – banks, third-party providers (TPPs), and merchants –will interact within the system. The commercial model, developed with input from Frontier Economics, proposes how fees and incentives will be structured to support a sustainable and competitive market. 

Given the interdependencies between the two, we have combined the responses. This ensures alignment between the legal framework and the commercial realities of delivering cVRPs at scale. 

Who responded 

We received 23 responses to the MLA consultation and 22 to the commercial model consultation, with 15 stakeholders responding to both. Respondents included banks, fintechs, consumer groups, regulators, and other industry participants. Their feedback has been instrumental in refining the proposals and identifying areas for further development. 

Key themes from the MLA consultation 

  1. Support for a standardised framework 
    There was broad support for the MLA as a mechanism to provide consistency and clarity across the ecosystem. Respondents welcomed the inclusion of a Participation Agreement, Rulebook, and supporting Schedules, which together define roles, responsibilities, and operational requirements. 
  1. Flexibility and inclusion 
    Many stakeholders emphasised the importance of ensuring the MLA supports a wide range of participants, including smaller firms and new entrants. Suggestions included simplifying onboarding requirements and ensuring the rules do not create unnecessary barriers to entry. 
  1. Customer protection and transparency 
    Respondents highlighted the need for strong consumer safeguards, particularly around consent, dispute resolution, and data handling. There was general agreement that the MLA should embed these protections from the outset. 
  1. Governance and compliance 
    Feedback called for clear governance structures and enforcement mechanisms to ensure compliance with the MLA. Some respondents suggested that the MLA Operator should have defined powers to manage non-compliance and resolve disputes. 

Key themes from the commercial model consultation 

  1. Affordability and incentives 
    Stakeholders stressed that the commercial model must strike a balance between affordability for merchants and sustainability for service providers. There was concern that high fees could deter adoption, particularly among smaller merchants. 
  1. Alignment with regulatory principles 
    Respondents generally agreed that the proposed model aligns with existing Payment Systems Regulator (PSR) and Financial Conduct Authority (FCA) pricing principles. However, some respondents called for further clarity on how fees would be calculated and adjusted over time. 
  1. Transition and use cases for future waves 
    Several participants asked for more detail on how the model would evolve as cVRPs expand beyond Wave 1 use cases (utility and rail companies, regulated financial firms, e-money institutions, government bodies and charities). There was a strong desire for a roadmap that outlines how pricing and participation might change in future phases. 
  1. Competition and Innovation 
    A recurring theme was the need to ensure that the model fosters innovation and does not entrench the position of incumbent players. Respondents highlighted the importance of monitoring market dynamics and adjusting the model as needed to maintain a level playing field. 

OBL, under contract to the Founding Funders Forum, will support delivery of the following:  

  • Refining the MLA documents to address the points raised with us. 
  • Working with legal advisors, Addleshaw Goddard, to finalise the Participation Agreement, Rulebook, and Schedules. 
  • Continuing to develop the commercial model, including further analysis of the ultimate pricing structure and manner in which it will be adopted.  
  • Provide the final MLA which will be recommended to the MLA Operator when it is established later this year. 

Thank you to all the stakeholders who took the time to respond. Your insights are helping to bring the Government’s National Payments Vision to life, delivering an industry-led innovation that offers commercial opportunities, greater choice to consumers and businesses, and economic growth. 

Nick Davey, OBL Head of Strategy