The UK Payments Initiative (UKPI), a new open banking payments scheme developed through collaboration between the UK’s Financial Conduct Authority (FCA), banks and fintech companies, has officially launched with the first live commercial deployments of recurring Pay by Bank payments in the country.
More than 30 UK banks and fintech firms are participating in the initiative, which is focused on expanding open banking payments beyond the limits of existing regulation. The launch marks one of the first new UK payment schemes introduced in the UK in nearly two decades.
The scheme is designed to support commercial variable recurring payments (cVRPs), enabling consumers to authorise ongoing payments directly from their bank accounts for services such as subscriptions, investments, utility bills and rent payments. Until now, Pay by Bank services in the UK have primarily been used for one-off transactions.
Industry participants said the initiative introduces frameworks around dispute management, liability and consumer protection intended to support broader adoption of recurring account-to-account payments.
Todd Clyde, CEO of Token.io, said: “This is the first new UK payment scheme in nearly 20 years – and it exists because merchants, billers, and consumers have outgrown what traditional payment methods can offer. The UK Payments Initiative gives Pay by Bank the enhanced functionality, consumer protection, and dispute frameworks needed to scale from millions of one-off transactions to the billions of recurring, automated payments that underpin everyday commerce.”
Token.io, which provides Pay by Bank infrastructure for banks and payment service providers, is among the founding shareholders of UKPI and holds a board seat alongside major UK banks.
Andrew Ducker, Senior Payments Consultant at Icon Solutions, said the initiative represents “an important step forward in the evolution of open banking,” adding that it could help shift the market “from a regulatory-driven model to a commercially-driven one.”
He noted that recurring open banking payments could become more widely used in areas including subscriptions, household bills and frequent payments to the same merchant, although future adoption would depend on customer experience and operational scalability across the payments ecosystem.
Pat Bermingham, CEO of Adflex, said the introduction of cVRPs could give consumers “more clarity and more control over what goes out on a regular basis.” He added that industry discussions around disputes and liability had previously slowed deployment of the technology.
The launch of UKPI coincides with a new rollout by European open banking company TrueLayer, which has introduced a recurring payment product called Bank on File.
Founded in 2016, TrueLayer provides open banking infrastructure and payment services across Europe. The company works with banks, fintechs and merchants to facilitate account-to-account payments and financial data connectivity.
The new Bank on File service enables customers to authorise recurring payments directly from their bank accounts without using cards or direct debits. Consumers authenticate payments using their banking app and biometric verification methods such as fingerprint or facial recognition.
The launch represents one of the first large-scale commercial deployments under the UKPI framework.
At launch, investment platform Trading 212 is using the service for recurring investments and account funding. IG Group and InvestEngine are also implementing the product for recurring investment deposits, while East Lothian Housing Association is using it for rent payments.
According to the FCA, 7.4 million UK consumers report feeling burdened by bills and credit commitments, while 5.5 million missed a payment during the previous six months. Industry data cited by TrueLayer states that failed subscription card payments can affect between 5% and 10% of recurring transactions.
Francesco Simoneschi, CEO and co-founder of TrueLayer, said: “For decades, digital commerce has relied on card-on-file payments. Pay by Bank proved there was a better way to pay, but until now it was limited to one-off transactions. Bank on File changes that. Consumers can now securely authorise recurring payments directly from their bank account, with full visibility, control and the ability to cancel at any time.”
Marc Najjar, Head of Strategic Operations at Trading 212, said the product allows customers to “automate their investments directly from their bank account.”
Steve Burke, Payments SME at IG Group, said the system allows customers to “securely connect their bank account and set up recurring investments in just a few clicks.”
Ben Jenkins, Chief Product Officer at InvestEngine, noted the product creates “a simple, secure way for customers to invest directly from their bank account.”
Martin Pollhammer of East Lothian Housing Association commented that the system enables “real time, fully automated, Pay by Bank payments,” while giving tenants direct visibility into completed rent payments.
The rollout of Bank on File follows TrueLayer’s recent acquisition of Buy Now, Pay Later provider In3, announced last week as part of the company’s expansion into credit services.
Future phases of the UK Payments Initiative are expected to extend recurring Pay by Bank functionality into e-commerce use cases including subscriptions, memberships and one-click checkout services.
