Merchants, payment service providers (PSPs) and third-party providers (TPPs) recognise the potential of Commercial Variable Recurring Payments (CVRP, in the UK) and Dynamic Recurring Payments (DRP, in Europe) to deliver better payment experiences, more choice, and lower processing costs. There are real concerns, however, that lack of bank support is impeding their delivery. 

These are the findings detailed in a new survey report published today by the leading account-to-account (A2A) payment infrastructure provider, Token.io, and Open Banking Expo, which surveyed over 100 senior leaders across UK and European banks, merchants, PSPs and TPPs to gauge their readiness and attitudes towards CVRP and DRP. 

This year’s data reveals substantial market appetite for both provisioning and adopting these new payment services. Over half of surveyed merchants [57%] plan to convert card payments to CVRP. Both UK and European PSPs and TPPs also recognise the importance of CVRP in driving greater merchant adoption of A2A payments, with an overwhelming 97% describing CVRP as “important”, and 28% and 33%, respectively, as "extremely important”.  

The survey findings also highlight the potential for CVRP to empower consumers with greater control over their payments while providing businesses with more efficient, cost-effective and secure recurring payment options. Respondents expect CVRP and DRP to surpass traditional methods like card-on-file and direct debit in delivering superior user experiences (59% and 51%, respectively) and increasing payment success rates. One-click e-commerce payments were identified as a top use case. 

While the SEPA Payment Account Access (SPAA) scheme has established a commercial model for DRP in Europe, no consensus has emerged as to an ideal pricing model for CVRP in the UK. Presenting data to illustrate expectations for CVRP compensation and pricing from a range of industry stakeholders, “This year’s survey findings provide good evidence that there is indeed scope for a model that provides sustainable compensation for banks and also delivers a strong incentive to merchants to adopt CVRP as a lower cost alternative to debit cards,” remarked Charles Damen, Chief Product Officer at Token.io.  

Ellie Duncan, Head of Content at Open Banking Expo, comments, “Merchants are ready to embrace commercial VRPs but to increase confidence and enable the frictionless user experience that is needed to encourage consumer adoption, the bank infrastructure and support needs to be in place. While there has been progress, we are yet to see the momentum that many across the ecosystem were expecting by now.” 

Although 79% of surveyed banks believe CVRP will benefit their account holders and the UK payments ecosystem, only 32% expect to support CVRP for low-risk use cases in 2025, and just 26% for e-commerce use cases. This lack of bank support was a significant concern for survey participants, with 73% suggesting regulatory intervention may be necessary. 

Survey results also point to consensus on the need for a consumer protection framework for CVRP, while most banks surveyed view CVRP as an opportunity to develop a new framework that benefits all ecosystem participants and addresses key issues with the current framework, like operational overhead, abuse, and inefficiencies.  

"Our 2024 industry survey unveils key challenges that need to be addressed to unlock the full potential of CVRP and DRP in delivering greater consumer choice and enhanced payment experiences," said Todd Clyde, Chief Executive Officer of Token.io. "We believe these survey results will reignite a sense of urgency and collaboration among industry stakeholders, working together to overcome obstacles and shape a brighter, more innovative future for the payments landscape."