UK Payments Initiative launches new A2A payments scheme in ‘defining moment’

The UK Payments Initiative (UKPI), a consortium of banks and fintechs, has launched a payment scheme to enable widespread adoption of account-to-account (A2A) payments, in what is being hailed as “a defining moment” in the UK.

The new industry-led scheme builds on the growth of Open Banking payments, which are typically one-off payments, by enabling recurring and automated payments to businesses and government in a way that is “consistent and scalable”, according to UKPI.

Working with participating banks and ecosystem partners, UKPI’s scheme establishes a shared rulebook, commercial model and operational standards for flexible, automated, or recurring A2A payments, which are powered by Open Banking.

Richard Koch, managing director, UK Payments Initiative

Initially, consumers will be able to approve regular or variable payments directly from their bank account to the government, utilities, charities, and financial services sectors, without sharing card details or relying on traditional direct debit payments. Payments will be taken only within the limits agreed by the consumer.

The new payment scheme is the first in the UK for nearly 20 years, since Faster Payments was introduced in 2008.

“This marks a defining moment for the next evolution of payments in the United Kingdom,” Richard Koch, managing director of UKPI, said. “This is about creating a payment model that works better for everyone, giving people more control and reducing friction for businesses. Our commercial approach will allow us to develop from these first customer journeys to subscription models and wider ecommerce.”

Industry reaction: ‘A full-circle moment’

Todd Clyde, chief executive officer of Token.io, which is a founding shareholder and board member of UKPI, said: “With the launch of UKPI, we now power commercial variable recurring payments (cVRP) through our platform, giving our partners immediate access to this powerful new payment capability, and a clear path to scale it to their merchants across use cases that were previously the exclusive domain of cards and direct debit.”

Token.io’s chief product officer Charles Damen

Charles Damen, Token.io’s chief product officer and UKPI board member, added: “Banks and fintechs do not always agree – but on this, we did. The UK needed a new payment scheme that could take Pay by Bank beyond one-off transactions and into the recurring, automated payments that power everyday life. What makes today historic is not just the scheme itself, it is the collaboration behind it.”

In March this year, GoCardless completed the first recurring Pay by Bank transaction on behalf of Jellyfish Energy, as part of a live testing phase.

Shaun Puckrin, chief product officer at GoCardless, said the UK’s wait for “a genuine alternative to traditional card payments” had been a long time coming.

“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,” he added. “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.”

Eline Blomme, chief product and strategy officer, Acquired

Eline Blomme, chief product and strategy officer at Acquired, called the launch of the new scheme “a real full-circle moment”.

“There is still work to do, but with major banks and fintechs now aligned behind a shared framework, this feels like a tipping point for the accelerated adoption of commercial VRPs in the UK,” she said.

“This will spark much-needed disruption to an industry that has not faced a true challenge to card or direct debit for decades. For too long, businesses have faced challenges when repeat payments fail, especially when central to revenue, retention and customer experience.”

Following the launch of UKPI’s scheme, TrueLayer revealed that four businesses had gone live with its new recurring payment method, Bank on File, including IG Group, InvestEngine, Trading 212 and East Lothian Housing Association.

“For decades, digital commerce has relied on card-on-file payments,” said Francesco Simoneschi, co-founder and chief executive officer of TrueLayer.

“Pay by Bank proved there was a better way to pay, but until now it was limited to one-off transactions. Bank on File changes that. Consumers can now securely authorise recurring payments directly from their bank account, with full visibility, control and the ability to cancel at any time.”