A report by Token.io and Open Banking Expo shows that merchants, PSPs, and TPPs are recognizing the benefits of Commercial Variable Recurring Payments (CVRP) and Dynamic Recurring Payments (DRP). These payment methods promise improved customer experiences, increased choice, and reduced processing costs.

However, the report highlights concerns that a lack of support from banks may hinder progress in implementing these services. The survey included over 100 senior leaders from UK and European banks, merchants, PSPs, and TPPs to assess their readiness for CVRP and DRP. Findings indicate a strong market interest in these payment options, with 57% of merchants planning to transition from card payments to CVRP.

Additionally, 97% of surveyed PSPs and TPPs view CVRP as important, with 28% and 33% rating it as extremely important, respectively. The report also notes that CVRP has the potential to give consumers more control over their payments while offering businesses more efficient and secure recurring payment options. Respondents anticipate that CVRP and DRP will outperform traditional payment methods, such as card-on-file and direct debit, in terms of user experience (59% and 51%, respectively).

One-click e-commerce payments were highlighted as a primary use case. Despite the establishment of the SEPA Payment Account Access (SPAA) scheme for DRP in Europe, there is currently no agreement on an optimal pricing model for CVRP in the UK. Data presented in the survey suggests the possibility of a sustainable compensation model that benefits both banks and merchants, facilitating the adoption of CVRP as a cost-effective alternative to debit cards.

While 79% of banks surveyed believe CVRP will benefit account holders and the UK payments ecosystem, only 32% plan to support CVRP for low-risk use cases by 2025, and just 26% for e-commerce applications. This lack of support from banks is a significant concern, with 73% of participants suggesting that regulatory intervention may be necessary. Consumer protection framework needed The survey also emphasizes the need for a consumer protection framework for CVRP, with most banks viewing it as an opportunity to create a new framework addressing existing challenges, such as operational overhead and inefficiencies.

Token.io's CEO, Todd Clyde, stated that the survey results highlight key challenges that must be addressed to maximize the potential of CVRP and DRP. He expressed hope that these findings will foster urgency and collaboration among industry stakeholders to navigate obstacles and enhance the payments landscape. The complete report outlines the top use cases and benefits for CVRP and DRP, banks' expectations for CVRP compensation, their support timelines, and willingness to participate in the SPAA scheme and its 2025 pilots.

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