GoCardless joins UK scheme for recurring Pay by Bank

GoCardless has joined banks, building societies and fintechs in launching the UK Payments Initiative scheme, opening the way for Recurring Pay by Bank in the UK.

The industry-backed scheme is intended to expand account-to-account payments and give businesses another way to collect regular payments directly from bank accounts. GoCardless said its new service is designed for recurring, flexible and automated payments using open banking infrastructure.

UK retail payments remain dominated by cards, accounting for 84% of spending by turnover, according to GoCardless. Businesses pay GBP £1.5 billion in fees because of the market position of Visa and Mastercard, it added.

Scheme operator UK Payments Initiative has been funded by banks, building societies and fintechs. Its launch creates a framework for recurring open banking payments across sectors including public services, utilities, charities and financial services.

Market opening

GoCardless is positioning the service as a lower-cost option for merchants that rely on repeat billing. Instant authorisation and the ability to automate regular collections could appeal to firms seeking an alternative to card payments and existing bank debit arrangements.

Research commissioned by GoCardless suggested strong interest among businesses that take recurring payments. It found that 89% of recurring revenue businesses believe the technology would significantly improve cash flow, while 91% expect it to reduce operational costs.

The same survey found that 49% of businesses intend to be early adopters. Among consumers, 38% said they would be open to trying recurring Pay by Bank, rising to 60% among Gen Z respondents.

The launch also reflects a broader policy push to build more competition and resilience into UK payments. Account-to-account methods have long been seen by parts of the industry as a way to reduce dependence on card networks and create more domestic control over payment rails.

Early rollout

Earlier this year, GoCardless processed its first recurring open banking transaction for Jellyfish Energy during the sector's live testing phase. The transaction provided an early operational example of how recurring bank payments could work in practice before broader adoption.

GoCardless said it has built features to address some of the practical limits of an early-stage rollout. These include routing a customer to Direct Debit when open banking is unavailable, auto-filling payment details based on existing payer data, and maintaining service uptime for merchants adopting the system.

That approach suggests providers still expect patchy coverage across some institutions and user journeys in the near term. Hybrid models that fall back on established payment methods may help firms trial recurring open banking payments without disrupting collections.

For businesses, the economics could be a major factor if adoption grows. Card processing fees are a persistent cost for merchants with subscription or instalment models, while failed or delayed payments can disrupt cash flow and add administrative work.

Open banking payments have so far had more success in one-off transactions than in repeat billing. A workable recurring model would address a major gap in the market, especially for sectors that need regular customer authorisation without repeated manual input.

UKPI Managing Director Richard Koch said GoCardless brought practical experience from years of account-to-account payments. "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," Koch said.

Shaun Puckrin, Chief Product Officer at GoCardless, linked the launch to longstanding concerns over concentration in the payments market. "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," Puckrin said.