As more products shift to usage-based pricing, real-time services, and flexible consumption models, fixed monthly charges have started to show their limits. Variable recurring payments (VRPs) are an open banking technology that offers a different approach: automated payments that adjust to real usage while staying within clear, customer-approved boundaries. In 2025, VRPs accounted for 16% of open banking payments in the UK.

Below, we’ll discuss what VRPs are, how they work in practice, and how they differ from fixed recurring payments.

What’s in this article?

• What are variable recurring payments?
  
• How do variable recurring payments work in the UK?
  
• How do fixed recurring payments differ from variable recurring payments?
  
• What technologies enable variable recurring payments?
  
• How do VRPs improve flexibility for UK businesses and customers?
  
• What challenges do variable recurring payment models face?
  
• How can UK businesses determine whether VRPs are right for them?
  
• How Stripe Payments can help
  

What are variable recurring payments?

Variable recurring payments (VRPs) are a way to automate ongoing payments when the amount isn’t always the same. Instead of charging a fixed fee on a rigid schedule, this model allows payments to change over time and still run automatically. The customer approves a set of rules up front, and payments are processed as needed as long as they stay within those rules.

How do variable recurring payments work in the UK?

VRPs front-load consent and guardrails to offer users a simpler experience. Here’s how they work.

One-time customer authorization

The customer authenticates with their bank and approves a recurring payment agreement that defines how much can be charged, how often payments occur, and how long the authorization remains valid.

Clear thresholds and limits

Payments run automatically when conditions are met. Every payment request is checked against the original rules before it’s approved so charges that exceed the agreed limits are automatically blocked rather than disputed later.

Payment initiation

After authorization, the business can trigger payments whenever charges are due without asking the customer to reapprove each transaction. Payments typically run over instant bank transfer networks, which means funds move immediately and both parties see confirmation right away. Active payment permissions are visible inside the customer’s banking interface, where they can be reviewed, modified, or canceled at any time.

Immediate failure signals

If a payment can’t be completed due to insufficient funds or rule violations, it generally fails instantly. That allows businesses to respond without delay.

How do fixed recurring payments differ from variable recurring payments?

Fixed recurring payments are built for consistency. Meanwhile, VRPs are built to adapt and still keep automation intact.

Here’s how fixed recurring payments differ from VRPs:

• Network scope: Fixed recurring payments rely on established card or direct debit networks and are broadly supported globally. VRPs operate through open banking networks (currently standard in the UK), are enforced by banks, and are limited to markets where open banking VRP frameworks exist.

• Payment amount: Fixed payments typically charge the same amount every cycle, but VRPs adjust according to usage, balances, or activity within preapproved limits.

• Visibility: VRPs have limited visibility in banking interfaces while fixed recurring payments often live inside the business’s system.

• Flexibility: Fixed recurring payments work best for regular subscriptions, while VRPs can handle fluctuating costs without requiring manual approvals each time.

• Risk of undercharging: Fixed payments can decouple from real usage, while VRPs are better suited to matching charges to actual consumption within defined caps.

• Failure patterns: Fixed payments are more prone to failure from expired cards or outdated credentials, while VRPs avoid card expiry by relying on bank accounts. But they can still fail for balance or consent reasons.

• Cancellation experience: VRPs can be paused or revoked directly through the bank interface, but fixed recurring payments typically require customers to contact the business to cancel.

What technologies enable variable recurring payments?

VRPs are possible in the UK because of several pieces of modern payments infrastructure. Here are the main components:

• Open banking application programming interfaces (APIs): Standardized APIs within the UK’s open banking framework allow banks to securely connect with third parties. This makes it possible for approved providers to initiate payments on a customer’s behalf.

• Consent-based authorization: Customers grant narrow, purpose-specific permissions that define payment limits, frequency, and duration. This replaces broad or open-ended mandates.

• Strong Customer Authentication (SCA): Initial setup uses bank-level authentication, often with biometrics or multifactor verification. This means permissions are tied directly to the account holder.

• Account-to-account (A2A) payment networks: Payments move directly between bank accounts, often over nearly real-time networks. This eliminates reliance on card infrastructure.

• Real-time validation systems: Banks check every payment request against stored consent rules before execution. This blocks anything that falls outside the approved boundaries.

• Tokenization and secure credentials: Sensitive account details are never shared with businesses. Instead, secure access tokens reference the permission without exposing banking data.

• Payment orchestration platforms: Payment providers such as Stripe help businesses access these capabilities without integrating directly with individual banks.

How do VRPs improve flexibility for UK businesses and customers?

VRPs make recurring payments more precise, more transparent, and easier to manage on both sides. Here are their benefits:

• Usage-based payments: Charges can adjust to real activity or consumption within preapproved limits so customers pay what they actually owe rather than fixed estimates.

• Customer-defined limits: Spending caps, frequency rules, and time boundaries are set up front, which helps decrease surprises and increase confidence in automation.

• Built-in visibility and control: Payment permissions are visible in the customer’s banking interface, where they can be reviewed, modified, or revoked at any time.

• Real-time execution and confirmation: Payments settle in nearly real time, which gives customers immediate awareness and businesses immediate certainty.

• Higher payment reliability: Bank-based payments aren’t affected by card expirations and replacements, which lowers failure rates and involuntary churn.

• Flexible pricing for businesses: Usage-based and hybrid billing models become easier to offer without adding billing complexity.

• Stronger trust over time: Clear rules and enforceable limits can make customers more willing to keep recurring payments turned on.

What challenges do variable recurring payment models face?

Typically, the challenges in implementing VRPs relate to system and adoption gaps that are still being worked on. Be mindful of the following:

• Uneven bank support: Not all UK banks support VRPs yet, which limits coverage and makes it harder to offer VRPs universally.

• Early-stage commercial models: Pricing structures for commercial VRPs are still developing, so long-term cost advantages compared to existing payment methods aren’t fully understood yet.

• Regulatory variation by region: Rules, standards, and timelines differ globally, which complicates rollout for businesses that operate across multiple countries. There are some cross-border limitations.

• Customer familiarity: Many customers aren’t yet aware of VRPs, so adoption requires clear explanation and intuitive user experiences.

• Liability clarity: There must be consistent frameworks that clarify responsibility for failed or disputed payments so customers feel as protected as they do with traditional payment methods.

• Consent lifecycle management: Authorizations can expire or need updates, requiring thoughtful renewal flows to avoid unintended payment interruptions.

How can UK businesses determine whether VRPs are right for them?

VRPs aren’t a default choice for every business. The decision comes down to how you bill, how your customers behave, and where payments slow down.

Consider these scenarios as you assess VRPs:

• Billing variability: If your prices change according to usage, volume, balances, or timing, VRPs can automate parts of manual billing and minimize time spent on invoicing, collections, and billing disputes.

• Payment reliability issues: If your business struggles with failed card payments, expired credentials, or delayed settlements, you might benefit from bank-based recurring payments.

• Customer expectations: If your customers value transparency, control, and easy cancellation, VRPs can improve trust without increasing churn.

• Market readiness: VRP adoption is strongest where open banking infrastructure is mature. Geography and bank coverage matter if you operate an international business.

• Embedded support: If your business already works with modern payment providers such as Stripe, you are better positioned to adopt VRPs without heavy integration work.

How Stripe Payments can help

Stripe Payments provides a unified, global payment solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.

• Improve payment performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.