Addleshaw Goddard is pleased to have worked with UK Finance to develop the Commercial Variable Recurring Payments model clauses. This is a positive step forward to help unlock the potential for open banking payments. The Financial services team at Addleshaw Goddard is proud to have built a strong relationship with UK Finance and leading Payments providers, with its insights and knowledge of regulations.

Rebecca Hickman Financial Regulation Partner (Payments) at international law firm Addleshaw Goddard commenting on VRPs in the UK said:

"The UK has a world-leading open banking infrastructure. Yet there remains a shared vision across the market that more can be done to unlock the potential of open banking. This vision is shared by regulators who are increasingly seeing interbank payments as a way of boosting competition between different payment systems, envisaging a future where customers could just as easily pay for products or services using interbank payments as they can by using their cards today."

Jana Mackintosh, Managing Director for Payments, Innovation and Resilience at UK Finance, said:

“The thought leadership and model clauses 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.

“We look forward to working with the Joint Regulatory Oversight Committee and all stakeholders in the open banking ecosystem to maximise the opportunities Variable Recurring Payments have to offer, and in particular, expand Variable Recurring Payments through a commercially driven model that has customers at its heart with carefully targeted regulatory support.”

UK Finance and Addleshaw Goddard published a report identifying the key issues and processes that are needed to develop VRPs for commercial applications and sets out recommendations for how those issues can be addressed through contractual arrangements. The report contained a set of model contractual terms that can be used in contractual arrangements between account providers and PSPs who are building and developing these propositions.

Key objectives of the model clauses include driving competition through the introduction of a new type of payment, increasing efficiencies by removing some of the transaction cost of bilateral negotiations between payment providers, and ensure customers have a consistent experience on important matters such as, transparency of information and security to help provide customers with the confidence to use VRPs in different contexts.

The report was presented at an event at the City Headquarter of Addleshaw Goddard with partners at the firm Rebecca Hickman, Will James and Al Mangan presenting on a panel. The work was led by Rebecca Hickman with support from Al Mangan, Jack Houselander, Thomas Withers, Callum Lee and Isabel Lu.