Open banking in the UK is growing rapidly. Latest industry figures show there are more than 16 million users now benefiting from the service.
The number of open banking payments has soared by 53% year on year, reflecting a significant shift in how consumers and businesses manage their finances.
A key driver of this transformation is the rise of variable recurring payments (VRPs), which now account for 16% of all open banking transactions. VRPs allow consumers and businesses to set up flexible, automated payments tailored to individual needs, offering greater control compared to traditional direct debits.
Variable recurring transactions (VRPs)
VRPs are an open banking technology that allows users to securely authorise trusted third parties to manage recurring transactions. VRPs offer consumers and businesses greater choice and flexibility while improving consumers’ financial wellbeing.
The FCA and the Payment Systems Regulator (PSR) have published a summary report of the development and rollout of VRPs.
Industry collaboration and innovation
In 2025, the FCA made seamless account-to-account payments a major focus, working closely with industry leaders to accelerate innovation. The FCA have seen significant progress towards this goal.
Before the end of 2025, the UK Payments Initiative (UKPI) – a new company formed by 31 firms to enable VRPs – will be set up. This is another new way to open up access to making flexible payments for consumers and businesses. Momentum is building across the market, with other organisations developing their own VRP schemes and transaction testing underway.
UKPI will operate a commercial VRP scheme, enabling consumers to make flexible, recurring payments to businesses such as utility providers. These services are already helping customers with irregular incomes to manage payment schedules more effectively. This scheme will enable a larger group of customers and businesses to access these services.
The first live payments under the UKPI scheme are expected in the first quarter of 2026, signalling the start of a new era for payments and open banking in the UK.
Over 2026, the FCA will continue to support industry in the rollout of VRPs.
Regulatory developments on the horizon
Looking ahead, the sector is preparing for regulatory changes.
The Treasury is expected to introduce legislation in 2026 that will grant the FCA new powers to set open banking rules, and they plan to consult on new rules for the long-term regulatory framework before the end of 2026.
This move aims to foster:
- a stable regulatory environment
- a competitive and innovative market
The FCA want the ecosystem to remain resilient, secure and responsive to new challenges – like improving reliability, error messaging, and ensuring adequate consumer protections.
The FCA have set out their strategic approach to the new rules.
For consumers, innovations like VRPs offer more control and flexibility over their finances.
For industry, the expansion of open banking is unlocking new opportunities for competition, efficiency and innovation – driving better services, sustainable commercial models and a more dynamic payments market.
Source: FCA
