GoCardless Launches Recurring Pay by Bank as part of New UK Payment Scheme

WHY THIS MATTERS

The formal launch of the UK Payments Initiative (UKPI) open banking scheme on June 3, 2026, backed by bank payment champion GoCardless, represents the most aggressive structural threat to the global card networks in a generation. For decades, retail and subscription payments in the United Kingdom have been dominated by a near-duopoly of Visa and Mastercard, which clear a staggering 84% of all spending by turnover. This reliance costs UK merchants over £1.5 billion annually in margin-eroding card-interchange, processing, and scheme fees.

While the first wave of Open Banking introduced “Pay by Bank” single-use instant transactions, it failed to displace credit and debit cards for recurring commerce, such as utility bills, digital subscriptions, and charitable donations. This was due to a severe regulatory limitation: standard open banking APIs required consumers to manually re-authenticate their banking app for every single payment event.

By activating the UKPI scheme, the UK financial sector is installing a standardized framework for Variable Recurring Payments (VRP). This paves the way for GoCardless’s Recurring Pay by Bank solution, which combines real-time API execution with long-term payment mandates. This structural milestone establishes an independent, low-cost, domestic Account-to-Account (A2A) payment rail that strips out the intermediate card processing nodes entirely. It allows businesses to safely automate flexible, variable pull payments directly from a customer’s checking account with zero reliance on international card infrastructure.

Bank payment company GoCardless has backed the launch of a new industry-led scheme designed for the next generation of open banking payments.  

Banks, building societies and fintechs have invested in scheme operator UK Payments Initiative (UKPI), which today has announced the scheme is now live. This paves the way for the introduction of Recurring Pay by Bank, GoCardless’ open banking-powered payment solution that enables recurring, flexible and automated bank payments.   

The new scheme supports the UK’s National Payment Vision to foster greater competition, innovation and resilience by driving widespread adoption of account-to-account (A2A) payments. Cards still dominate UK retail payments, comprising 84% of spending by turnover and costing businesses £1.5bn in fees through the near-duopoly of Visa and Mastercard. Recurring open banking payments represent the first viable, low-cost alternative to this legacy system, and an opportunity to build a set of independent, domestic payment rails.   

The substantial savings, combined with instant authorisation, flexibility, and bank-grade security, make the new payment method highly appealing to both merchants and payers. GoCardless research indicates that: 

• 89% of recurring revenue businesses believe the technology would significantly improve cash flow, while 91% expect it to reduce operational costs 
• 49% of businesses intend to be early adopters 
• 38% of consumers would be open to trying recurring Pay by Bank, rising to 60% of Gen Z 

With the scheme now live, recurring open banking payments can be used for payments to public sector bodies, utilities, charities, financial services, and more.  

Recurring Pay by Bank   

In March, GoCardless completed the first recurring open banking transaction during the industry’s ‘live testing’ phase, processed on behalf of Jellyfish Energy. While the wider industry rollout is still in its infancy, GoCardless has designed Recurring Pay by Bank to overcome early-stage market challenges, offering businesses a highly effective platform they can confidently use today. Key features include:  

• Full payer coverage from day one through ‘intelligent routing’ that automatically shifts payers to Direct Debit if open banking isn’t available. 
• A ‘bank guess’ feature: the GoCardless platform has seen 80% of UK payers over the past 15 years. This data is leveraged to auto-fill payment details and create a smoother checkout experience. 
• Industry-leading uptime, ensuring reliable service — a critical factor for early adopters and a common concern across the industry. 

Shaun Puckrin, Chief Product Officer at GoCardless, said: “For a long time, the UK has been waiting for a genuine alternative to traditional card payments. By launching an industry-wide scheme for recurring Pay by Bank, we will bring real competition to a market that’s been dominated for decades by a costly card duopoly.   

This milestone establishes the UK as a country that owns its financial future. We’re creating payments infrastructure that is modern, competitive, and free from over-reliance on external networks. Built on APIs for easy instruction and real-time execution, it is ideally placed to become the foundation of agentic commerce — where AI agents, automated systems, and instant payments converge.  

It’s a response to enormous market demand, and a shift that will change the way money moves for everyone.”  

Richard Koch, Managing Director at UKPI, said: “The launch of this scheme is a significant step forward as we build a faster, fairer payment ecosystem that unlocks genuine choice for businesses and consumers. Having GoCardless at the table brings 15 years of account-to-account expertise right into the heart of this initiative. Their experience is vital as we move forward, helping us turn open banking payments into a practical tool that people will trust and use every single day.” 

FF NEWS TAKE

GoCardless is leveraging its massive proprietary data repository to solve the “cold start” user-experience problems that typically choke early-stage open banking initiatives. Historically, merchants have been hesitant to adopt open banking payments due to fragmented bank support and user drop-off during checkout. If a consumer’s specific bank has not yet updated its APIs to handle recurring open banking requests, the checkout process instantly breaks down, resulting in a lost sale.

Under Chief Product Officer Shaun Puckrin, GoCardless’s Recurring Pay by Bank architecture bypasses this market fragmentation through intelligent data-driven routing. Over the past 15 years, GoCardless has quietly processed transaction ledgers for over 80% of the UK’s active banking population.