WHY THIS MATTERS: The transition from legacy Direct Debit to commercial Variable Recurring Payments (cVRP) represents a foundational shift in how the economy handles institutional cash flow. For years, businesses have been tethered to an aging collection infrastructure plagued by rising failure rates and delayed settlement times—a bottleneck that directly hampers operational liquidity. The integration of cVRP into high-volume collection hubs is the logical evolution of Open Banking, finally moving the concept beyond simple point-of-sale transactions and into the realm of complex, automated recurring revenue. By enabling real-time settlement and programmable flexibility, this development offers a critical upgrade to the payment orchestration layer of the enterprise. For finance leaders, this is more than an operational tweak; it is a strategic necessity to reduce friction, eliminate settlement lag, and regain control over the customer payment lifecycle in an increasingly digital-first landscape.
Modulr, the payments automation platform built to scale, announced the launch of commercial Variable Recurring Payments (cVRP), designed to offer a flexible, faster alternative to traditional payments for businesses collecting large volumes.
This announcement follows the rollout of the scheme by the UK Payments Initiative (UKPI). Modulr has helped shape the scheme from the outset as a UKPI founding shareholder and is delivering cVRP to customers as part of its Collections Hub, which offers unified access to multiple payment methods on one automated platform.
Faster, more reliable collections at scale
There are currently persistent challenges for businesses that collect recurring payments. Direct Debit failures have been increasing for five consecutive years and are currently sitting at 9% higher year-on-year in 2026 than 2025, representing significant costs for UK businesses.
Modulr’s customers are already using Variable Recurring Payments to automate and scale collections. These include lenders, such as Oakbrook, who are providing borrowers greater flexibility, visibility, and control when managing loan repayments, and earned wage access businesses, which are enabling employees to easily manage and repay wage advances.
cVRP now expands the use cases that can benefit from Open Banking, enabling businesses to collect varying amounts from a customer’s account each month with just one initial, authorised sign-off, removing the need to ask permission each time. Every payment settles via Faster Payments, giving real-time confirmation.
Modulr brings cVRP to market through its Collections Hub, combining Direct Debit and Open Banking payments, on a single platform built to scale with its 6,000+ customers. The Collections Hub is designed to respond to customers’ collections needs, with customers saying the Hub’s services add “resilience and reliability” to their processes.
Melek Pirgon, Chief Product Officer at Modulr, commented: “Businesses running high-volume collections shouldn’t have to choose between reliability and flexibility. cVRP gives them both. As a founding member of UKPI, we’re now delivering cVRP to customers as part of our Collections Hub, providing a scalable alternative to traditional payments.”
Richard Koch, Managing Director, UK Payments Initiative, added: “The launch of UKPI is a significant step in building a more modern and flexible payments ecosystem that gives businesses and consumers real choice. With Modulr bringing deep expertise in powering and scaling payment flows, we are strengthening the foundations needed to make open banking payments widely accessible, reliable and ready for everyday use.”
cVRP is available now. Visit https://www.modulrfinance.com/
FF NEWS TAKE: This is a clear shot across the bow of traditional Direct Debit providers. Modulr’s push moves the needle by proving that cVRP can scale for enterprise-level demands, not just niche use cases. We are witnessing the beginning of the end for the “three-day wait” culture in recurring collections. The industry should now watch for the speed of merchant adoption; if success metrics remain this high, we expect a rapid migration of volume away from legacy rails.
