Open banking is moving beyond account aggregation and into the heart of recurring payments. Modulr’s launch of commercial Variable Recurring Payments (cVRP) highlights how account-to-account payment infrastructure is beginning to challenge traditional Direct Debit and card-on-file models. As enterprises seek greater reliability and faster cash settlement, programmable payments are emerging as a new foundation for collections and treasury management.
Payments automation platform Modulr has announced the commercial launch of commercial Variable Recurring Payments (cVRP) within its central Collections Hub. Developed in tight coordination with the newly established UK Payments Initiative (UKPI), the country’s first new formalised payment scheme since the introduction of Faster Payments in 2008, the real-time account-to-account (A2A) infrastructure is engineered to give high-volume enterprises a faster, more reliable alternative to legacy Direct Debit rails and expensive card-on-file billing systems.
The integration arrives at a critical juncture for UK corporate finance teams. Modulr’s industry data indicates that Direct Debit transaction failure rates have climbed for five consecutive years, sitting 9% higher year-on-year. These systemic settlement failures introduce significant manual recovery overhead and directly impair cash flow predictability. Through cVRP, corporate billers can establish a single, upfront digital consent parameter with an accountholder. This standing authorisation allows the merchant to programmatically pull varying transactional sums from a client’s bank account each month without requiring individual, manual authorisation loops for each consumption change.
Because the underlying architecture operates natively via the UK’s open banking rails, every transaction settles instantaneously over the Faster Payments network. This framework provides corporate treasuries with real-time liquidity settlement, automated pre-execution balance checks to prevent overdraft rejections, and immediate transaction status confirmation. Initial institutional adoption is rolling out across select Wave 1 eligibility verticals:
- Regulated Financial Services: Alternative lenders like Oakbrook are using the service to offer flexible loan repayment schedules, while earned-wage access firms utilise it to automate variable payroll advance collection.
- Utilities & Telecommunications: Energy, water, and broadband providers deploy the rails to auto-collect precise monthly billing figures that fluctuate based on real-time consumption data.
- Digital Wallets & Government: E-money platforms utilise cVRP for salary-linked automated micro-savings, while municipal councils are evaluating the network to align local tax collection precisely with residents’ payment schedules.
Melek Pirgon, Chief Product Officer at Modulr, stated that the cVRP framework allows enterprise clients running complex, high-volume collections to maximise both operational flexibility and cash settlement security without friction. Richard Koch, Managing Director of the UK Payments Initiative, noted that Modulr’s structural involvement as a founding UKPI shareholder strengthens the foundational ecosystem needed to scale automated open banking payments into a robust, everyday alternative to traditional banking networks. The software layer is live and available immediately for integration across Modulr’s base of over 6,000 corporate clients, operating alongside traditional Bacs Direct Debit tools within a unified, API-driven dashboard.
What this means for the industry
- Open banking is evolving from a data-sharing framework into a payment infrastructure layer, enabling real-time recurring transactions.
- Direct Debit’s dominance is facing increasing pressure, particularly as rising failure rates impact collections and cash flow predictability.
- Programmable account-to-account payments offer greater flexibility, allowing businesses to collect variable amounts without repeated customer authorisation.
- Real-time settlement improves liquidity management, giving finance teams immediate visibility and faster access to funds.
- Payment failures and manual recovery processes could be significantly reduced through balance checks and instant payment confirmation.
- Utilities, lenders, e-money providers and public sector organisations are among the first sectors adopting cVRP, demonstrating the broad applicability of open banking payments.
- Open banking is becoming a serious competitor to card networks and legacy payment rails, creating new opportunities for payment providers and fintech platforms.
- The next phase of payments innovation is shifting from moving money faster to making payments more intelligent and automated.
