A new study from bank payment specialist GoCardless suggests that the UK’s reliance on legacy payment systems is reaching a critical point. The report, Revolutionising Recurring Revenue, indicates that traditional methods are becoming increasingly unsustainable, with nine out of ten business leaders identifying commercial Variable Recurring Payments (VRPs) as a key solution for the future.
For industries with high-frequency billing, such as utilities, telecommunications, and financial services, the adoption of VRPs is expected to reduce revenue loss and improve customer retention.
The hidden cost of card friction
The research, based on a survey of 489 UK business leaders, highlights significant inefficiencies tied to traditional card networks:
- Widespread dissatisfaction: 73% of recurring revenue businesses report ongoing issues with card payments
- Administrative burden: 42% spend more than three hours per week managing payment-related problems
- Revenue erosion: Card-related inefficiencies cost businesses an average of 3.5% of monthly revenue
Commercial VRPs: the strategic unlock
As commercial VRPs begin rolling out across the UK, early adopters see strong potential benefits:
- Cash flow optimization: 89% believe VRPs will significantly improve cash flow
- Operational efficiency: 91% expect reduced operational costs
- Consumer adoption: 38% of UK consumers are open to VRPs, rising to 60% among Gen Z
- Sector demand: 46% are willing to use VRPs for energy bills and 35% for telecom services
Operational simplicity over everything
Despite strong interest, ease of implementation remains the primary concern for businesses:
- 41% want access through their existing payment providers
- 41% require broader bank coverage to ensure customer adoption
Shaun Puckrin, Chief Product Officer at GoCardless, noted that demand is growing for more efficient, bank-led payment solutions. He emphasized that solutions like Recurring Pay by Bank are already enabling this transition during live testing phases.
About GoCardless
GoCardless is a global provider of bank-to-bank payment solutions, serving over 100,000 businesses worldwide. The company processes more than $130 billion annually across 30+ countries, focusing on direct debit, real-time payments, and open banking infrastructure.
With connectivity to over 2,500 banks and AI-powered optimization tools, GoCardless enables businesses to improve payment success rates while reducing fraud and operational complexity.
