Every BNPL plan is a recurring payment in disguise. A customer agrees at checkout to pay a set amount on set dates, and the lender collects it. Yet most of those instalments still run on debit card rails, which were designed for one-off purchases and adapted for repeat charges.
We think that's about to change, and that the change will matter more to BNPL than any redesign of the checkout button.
What Variable Recurring Payments are
Variable Recurring Payments, or VRPs, let a customer give a business permission once to collect payments from their bank account, within limits the customer sets: a maximum per payment, a maximum per month and an end date. Each payment is then made directly from the customer's bank account, through open banking, without the customer approving it each time.
It combines the convenience of a stored card with the security and control of paying from the bank. The customer can see and cancel the permission in their banking app at any time.
Where the scheme stands today
Commercial VRPs went live through the UK Payments Initiative on 2 June 2026, the first new UK payment scheme since Faster Payments. Wave 1 covers energy, utilities and telecoms, regulated financial services such as mortgage servicing, e-money institutions, government and registered charities.
BNPL is not in Wave 1, and neither are unsecured loan repayments. Wider use cases are expected in later waves, but the timing for BNPL hasn't been confirmed. Coverage is also still growing bank by bank.
So, to be clear: VRP for BNPL isn't live yet. But it's worth planning for now.
What VRP changes for BNPL
With VRP, the customer decides the ceiling. That's a natural fit with the Consumer Duty and with the FCA's new expectations on affordability: a customer can authorise exactly the plan they've agreed to, and nothing more.
The permission is set up inside the customer's banking app, with their bank's own security, so there are no card numbers to store or protect. Expired and replaced cards are one reason card repayments fail, and a VRP mandate is tied to the bank account, not a card. VRP payments don't carry card scheme fees, which matters on small, frequent repayments. And payments settle over Faster Payments, so lenders know straight away that an instalment has been paid.
What VRP won't solve
It's worth being honest about the limits.
VRP is a way to collect payments, not a way to decide whether to lend. Affordability still has to be assessed, and the new FCA rules still apply in full. A customer can still have an empty account on the due date. And because customers control the mandate, they can cancel it, which is a feature for them and something lenders have to plan for.
There are also commercial and scheme details for BNPL that haven't been confirmed yet, including pricing and exactly which use cases will qualify.
How to prepare now
The lenders best placed for VRP will be the ones that don't need to rebuild anything when it arrives.
In practice, that means getting customers used to paying from their bank account now. Pay by bank is already available for one-off repayments, catch-up payments and early settlement. Refunds can go back to the customer's bank account over Faster Payments. And consented account information can support affordability checks today.
A lender doing those three things already has the customer relationship, the bank connection and the operational processes in place. When BNPL becomes eligible for VRP, it's a switch, not a project.
Where we fit
We've spent six years building open banking for UK businesses, including recurring payments and bulk payouts. For BNPL lenders, we offer pay by bank for repayments and refunds, account information for affordability checks, and a path to VRP as the scheme opens up, all from one FCA-regulated provider. And you'll deal with the people who built it.
If you're planning your repayment strategy for 2027, it's worth an hour now to work out what VRP will change for you.
To talk about VRP and BNPL, email sales@fena.co.
Article by
Gosia Furmanik
CEO and Founder
Published on
