VRP open banking refers to Variable Recurring Payments delivered through open banking APIs. A VRP lets customers authorise a regulated provider to make multiple future payments from their bank account, with amounts and timing that can vary within agreed limits—like a smarter, API-powered direct debit.
This guide explains what VRP is, how it works, how it differs from direct debit, what a VRP bank mandate is, and where VRP is available. For a short definition, see our VRP glossary entry or What is a Variable Recurring Payment?
What is VRP in open banking?
In open banking, VRP is a payment instruction that uses bank APIs so an authorised provider can initiate recurring payments on the customer's behalf. The customer consents once and sets limits (e.g. max per payment, daily or monthly caps). Within those limits, the provider can pull payments without the customer logging in again.
VRPs sit on top of Payment Initiation Services (PIS) and are often described as the next step beyond one-off "pay by bank" flows. They are ideal for subscriptions, utility bills, savings sweeping, and any use case where amounts or dates vary but the customer wants to avoid re-authorising every time.
What is a VRP?
A VRP is a Variable Recurring Payment: an automatic transfer from one account to another at intervals, with amounts that can change within parameters the customer agreed to. The key difference from a fixed direct debit is that each payment can be a different amount (e.g. monthly energy bill, subscription plus usage).
The customer sets up the arrangement once by giving a VRP mandate (see below). After that, the provider can initiate payments that stay within the agreed limits. Settlement is typically real-time or same-day, unlike traditional batch direct debit schemes.
How VRP works
- Customer connects their bank via the provider's open banking flow (e.g. redirect to bank, SCA).
- Customer sets the VRP mandate: maximum single payment, daily/monthly limits, and (where supported) payment purpose or payee.
- Provider stores the mandate and can initiate payments within those limits without further customer action.
- Each payment is sent through the open banking / instant payment rails and settles in real time.
- Customer can revoke or change the mandate at any time via the provider or their bank.
VRP use cases
- Sweeping — Moving money between the customer's own accounts (e.g. current to savings) to avoid overdrafts or earn interest. UK banks were mandated to support this first.
- Subscriptions — Recurring charges that may vary (e.g. add-ons, usage-based tiers).
- Utilities & bills — Variable monthly amounts based on consumption.
- BNPL / instalments — Collecting scheduled repayments.
- Investments & savings — Regular contributions with flexible amounts.
What is the difference between direct debit and VRP?
| Aspect | Direct debit | VRP (open banking) |
|---|---|---|
| Settlement | Batch (e.g. 3 working days) | Real-time / same-day |
| Consent | Paper or online mandate; payee pulls | One-time open banking consent with clear limits |
| Control | Cancel via bank; less visibility per payment | Per-payment and cumulative caps; revoke anytime |
| Technology | Legacy schemes (BACS, SEPA DD) | Open banking APIs + instant payment rails |
Direct debit remains widely used; VRP is growing where open banking adoption is high (especially the UK) and for use cases that benefit from real-time settlement and clearer customer control.
What is a VRP bank mandate?
A VRP bank mandate is the single consent the customer gives to an authorised payment provider to initiate future payments from their account. It specifies the rules: maximum amount per payment, maximum total over a period (e.g. per day or month), and how often payments can be made. Some implementations also allow restricting payments to a specific payee or purpose (e.g. "sweeping only").
Once the mandate is in place, the provider can charge within those limits without asking again. The customer can cancel or amend the mandate at any time through the provider's app or their bank. This is a core part of the UK's VRP design and is being reflected in EU proposals (PSD3/PSR).
VRP by region
- UK: VRP mandated for sweeping; commercial VRP (paying third parties) is rolling out. See open banking regulations for context.
- EU: PSD3/PSR proposals include VRP-style recurring payment provisions; timelines vary by country.
- Australia: CDR action initiation roadmap includes recurring payment capabilities.
- Brazil: Pix Automático offers recurring payments in the local ecosystem.
VRP and payment initiation providers
Many API aggregators and payment initiation providers support or are adding VRP, especially in the UK. Compare coverage, fees, and use cases on our Payment Initiation Services page and API aggregators directory.
Frequently asked questions
VRP (Variable Recurring Payments) in open banking is a payment instruction that lets customers authorise a regulated provider to make multiple future payments from their bank account via open banking APIs. Amounts and timing can vary within limits the customer sets. It is the open-banking successor to direct debits: real-time settlement, clearer control, and typically lower fees. The UK led with VRP for sweeping (moving money between your own accounts) and is expanding commercial VRP for paying merchants.