UK Payment Systems Regulator Publishes Response to Call for Views on Expanding Variable Recurring Payments

The U.K. Payment Systems Regulator has published a response to its call for views on proposals for the expansion of variable recurring payments. VRPs allow customers to safely connect authorised payment providers to their bank accounts using open banking so that they can initiate recurring payments (which may be made at flexible intervals and in varying amounts). The Competition and Markets Authority has already mandated nine U.K. banks (the 'CMA9') to implement VRPs for payments between accounts belonging to the same person. The PSR's proposals would enable payments between accounts in different names (so-called 'non-sweeping VRPs'). Phase 1 of the expansion would enable the extension of VRPs to low risk use cases, namely regulated financial services, regulated utilities sectors, and local and central government. The PSR sets out its responses to stakeholder feedback on the key changes required to expand VRPs in this way, including: (i) coordinating the expansion of VRPs through a multilateral agreement - the PSR continues to view an MLA as an efficient way of managing relationships between sending firms and payment initiation service providers, but acknowledges concerns regarding Pay.UK's capacity to deliver the MLA on time. The PSR will work closely with the VRP implementation group to assess which specific rules an MLA should include and who might be best placed to operate it; (ii) mandated participation - the PSR agrees that the 'CMA9' concept should not be used to determine participation in the expanded VRPs and will continue to assess the necessity and scope of mandated participation; and (iii) pricing principles and possible price intervention - the PSR will evaluate different approaches to pricing VRP Application Programming Interface access in Phase 1. The PSR aims to share a set of updated proposals in the autumn.

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