With VRPs, users can give authorized payment service providers permission to regularly withdraw money from their bank account, with the flexibility to adjust the amount and schedule within predetermined bounds.

The UK's financial regulators have decided to implement non-sweeping VRPs in Phase 1 by the third quarter of 2024.

UK Finance and Addleshaw Goddard have developed a set of model contractual terms that can be used in agreements between account providers and PSPs to facilitate the establishment of VRPs for commercial uses.

They claim that the model provisions will promote competition, boost efficiency by reducing some of the transaction costs associated with bilateral discussions between payment providers, and provide a uniform banking client experience.

It is "entirely voluntary" to adopt the open source model clauses, while UK Finance encourages the sector to do so whenever feasible.

As stated by Jana Mackintosh, MD, UK Finance, "The model clauses and thought leadership we have developed with different types of firms including banks, fintech, and schemes are a significant milestone in the progression of Variable Recurring Payments and a stepping-stone to a wider Multilateral Agreement."