Recurring payments are the backbone of modern business models. From subscriptions to utilities, gyms to charities, the ability to collect regular payments is critical to cash flow and customer experience. But the methods we’ve relied on – cards and Direct Debit – are showing their age.

With Commercial Variable Recurring Payments (cVRP) - think of these as Smart Debits - the UK is entering a new phase. They promise the cost efficiency of account-to-account transfers with the convenience of a card-on-file experience. For enterprises, the challenge now is how to prepare for the shift.

Below we answer the most common questions from CFOs, product managers, and technology leaders planning their migration.

What is cVRP, and how does it differ from VRP?

Variable Recurring Payments (VRP) already exist in the UK through “sweeping” – transferring money between an individual’s own accounts, such as moving spare funds into savings.

cVRP (Commercial VRP) extends the model so that businesses can collect payments directly from customer bank accounts within agreed limits - Direct Debit redesigned for the digital age: real-time settlement via Faster Payments, customer-controlled permissions, and bank-enforced safeguards.

The industry-funded operator, expected to trade as UK Payments Initiative Ltd, will bring cVRP to market from 2025, supported by thirty-one founding organisations, including Wonderful, which operates Asima as it's enterprise division.

How do customers set up a Smart Debit?

Setup begins with a single, clear authorisation through the customer’s bank. As part of that consent, the customer agrees to:

• Maximum amount per payment
• Cumulative cap per period (for example, £100 per month)
• Frequency and expiry date

Once in place, the customer can see and manage these mandates in their banking dashboard. If a business attempts to collect outside the agreed range, the payment is blocked automatically. Consent can be revoked at any time.

This provides more transparency and control than today’s card-on-file or Direct Debit systems.

Why should enterprises migrate to Smart Debits?

There are three main drivers:

1. Cost reduction – Open btaianking transactions avoid card scheme fees. As adoption grows, regulators and industry expect downward pressure on costs compared to both cards and Direct Debit.
2. Cash flow benefits – Settlement is near real time through Faster Payments, improving liquidity and reducing reconciliation lag.
3. Lower failure rates – No card expiries or outdated details. Mandates remain valid until revoked.

Add to this a clearer liability framework under development and improved consumer protections, and Smart Debits become a compelling alternative.

How does liability work under cVRP?

With cards, liability often sits with the merchant until disputes or chargebacks are resolved. With Direct Debit, the Direct Debit Guarantee provides strong consumer protections but can create operational overhead.

Under cVRP, the liability framework is being designed jointly by regulators, Open Banking Limited, and industry bodies such as UK Finance. Early proposals suggest:

• Customer protections through enforceable consent parameters
• Bank-side enforcement of those parameters, blocking invalid collections
• Dispute processes that are clearer than chargebacks and faster than Direct Debit indemnities

Enterprises will need to adapt customer service playbooks to reflect these changes, but the overall effect should be simpler and fairer for both sides.

What is the migration path from cards or Direct Debit?

Migrating to Smart Debits can be phased. A practical blueprint is:

1. Map existing recurring models – Identify subscription plans, billing cycles, or membership fees currently taken by card or Direct Debit.
2. Define consent parameters – Translate current billing rules into cVRP mandates (amount caps, periods, expiry).
3. Design the consent journey – Build flows that are clear, mobile-first, and meet bank UX standards.
4. Handle refunds and disputes – Update systems and teams to manage refunds within Faster Payments constraints.
5. Plan reconciliation – Use transaction IDs and webhook notifications to match incoming payments in near real time.
6. Pilot with a segment – Start with a controlled customer group, measure success, and then expand.

What happens if a customer revokes consent?

This is a critical operational question. If a customer cancels a Smart Debit in their banking app, the merchant is immediately unable to collect further payments.

Enterprises must:

• Provide clear notices to the customer explaining what services will be affected
• Build real-time alerts into billing and CRM systems
• Offer alternative payment methods if the customer wants to continue the service

Handled well, this can even improve trust, since the customer sees the business operating transparently.

How soon will Smart Debits be available at scale?

Initial pilots are expected in regulated sectors during late 2025, with wider adoption following once the Future Entity establishes baseline standards.

Enterprises with a high dependency on recurring revenue should start preparing now. Integration takes time, and early movers will benefit from both cost savings and customer goodwill.

How does Asima support Smart Debits?

At Asima, we’ve built Smart Debit support into our infrastructure from day one. That means:

• Clean APIs for mandate creation, monitoring, and cancellation
• Webhook notifications for consent revocations or failed collections
• Predictable pricing – low, per-transaction fees without percentage mark-ups
• UK-based compliance aligned with FCA regulation and the Data (Use and Access) Act 2025

Because we also power free donations for UK charities via Wonderful.org, we understand recurring payments not just as a technical challenge but as a matter of trust and reliability.

What should enterprises do next?

Ask yourself three questions:

1. How much are we currently spending on card and Direct Debit processing for recurring revenue?
2. How would real-time settlement improve our cash flow and customer experience?
3. What is our plan for migration once Smart Debits are widely available?

If the answers reveal a significant opportunity, it’s time to put Smart Debits on your 2025 roadmap.

Final thought

Smart Debits are not just another payment option. They are a structural upgrade to how UK enterprises collect recurring payments. With cVRP, businesses can offer customers more control, reduce costs, and improve resilience – while regulators embed stronger safeguards.

The migration will take planning, but those who move early will gain a competitive advantage.

If you are ready to explore Smart Debits with an enterprise-grade partner, contact us at asima@wonderful.co.uk.