Recurring payments are not an invention of the digital age. Long before banks, cards or apps existed, people regularly paid for ongoing services: farmers paid dues to their feudal lords, craftsmen made contributions to their guilds, and church tithes governed reliable, often variable payments over centuries. Amounts, timing and methods were flexible – people paid what was due, when it was due.
What was missing were standardisation, transparency and automation. Every payment required personal arrangements, trust and manual oversight.
Today, this principle lives on in a modern form. Through Open Banking and digital consent processes, Variable Recurring Payments transfer this historically evolved logic into a secure, automated and controllable payment environment – turning a centuries-old concept into a contemporary payment solution.
Variable Recurring Payments – a definition
Variable Recurring Payments (VRP) refer to a payment model within the Open Banking framework in which a customer grants a Payment Initiation Service Provider (PISP) an ongoing consent to initiate recurring payments with variable amounts and/or variable frequency directly from their bank account.
Unlike traditional standing orders or direct debits, Variable Recurring Payments are flexible, account-based and controllable in real time. The customer defines clear parameters in advance – such as maximum amounts, payment intervals, purposes or durations – within which payments can be executed automatically and without renewed authentication.
VRPs are built on the Open Banking infrastructure (e.g. PSD2 / UK Open Banking) and therefore enable secure, transparent and controlled recurring payments, particularly for use cases such as subscriptions, usage-based services or variable bill amounts.
Benefits for the end customer
The customer defines clear parameters in advance – such as maximum amounts, payment intervals, purposes or durations – within which payments can be executed automatically and without renewed authentication. This offers many advantages:
- High flexibility & control
The customer defines parameters such as maximum amount, interval, duration or purpose and can adjust or revoke the consent at any time. - Maximum convenience
After a single Strong Customer Authentication (SCA), payments are processed automatically – without the need for repeated approvals. - Independent of cards & direct debits
No issues caused by expired cards, card replacements or failed direct debits. - Enhanced security
Use of regulated Open Banking interfaces with clearly limited and traceable consent. - Ideal for variable amounts
Particularly well suited to usage-based costs such as energy, mobility or subscriptions – customers only pay for what they actually use. - Fast processing
Direct account-to-account payments ensure timely and reliable execution.
Benefits for payment initiation service providers
VRP also offers a range of advantages for PISPs:
- Efficient payment processes
A one-time customer consent enables automated payments, reduces manual effort and lowers process costs. - Higher payment success rates
Direct account-to-account payments avoid typical card and direct debit issues and support stable cash flows. - Improved user experience
Fewer SCA interruptions lead to smoother journeys, higher conversion rates and fewer drop-offs. - Greater control & transparency
Clearly defined payment parameters and full traceability simplify monitoring, reporting and compliance. - New business models & differentiation
Support for innovative use cases such as usage-based billing, flexible subscriptions or just-in-time payments. - Reduced risk
Lower return and fraud risk thanks to authorised real-time payments.
Conclusion
Variable Recurring Payments combine the flexibility of historically established recurring payments with modern technology. They give end customers greater control, transparency and convenience, while payment initiation service providers benefit from more efficient processes, higher success rates and new business models. Direct, secure account-to-account processing creates stable, automated payment flows that optimise both the user experience and business operations. As digitalisation and Open Banking standards continue to advance, VRPs are set to become increasingly embedded in everyday payment processes and to enable innovative, usage-based business models.
