A new era for recurring payments, but Direct Debit isn’t going anywhere
There’s no shortage of news in payments right now about commercial Variable Recurring Payments (cVRP) – often called “pay by bank”, although what it should be called is a debate for another day. Some are positioning this open banking route for recurring payments as a competitor to Direct Debit. For most organisations though, it will be a compliment, not a replacement.
Direct Debit is, and remains, one of the most trusted payment rails in the UK. It’s nearly 60 years old, and that’s a strength rather than a weakness: its consumer protection and brand recognition make it one of the best methods any organisation can adopt for recurring payments.
Still growing
It came as no surprise to us that Direct Debit volumes grew again last year, reaching a record 5 billion payments in 2025. In the first half of this year volumes rose month on month, and only recently have we seen a dip. Even so, 2026 looks set to be another record year for Bacs Direct Debit.
Our own data tells the same story. More and more of our clients are moving collections to Direct Debit to give their customers a smooth, predictable way to pay and we don’t see that changing any time soon.
Trusted for a reason
None of this will surprise anyone who works in the industry. Pay.UK’s latest research puts consumer satisfaction with Direct Debit at an remarkable 92%. Consumers value its reliability and the way it helps them manage their finances, and the Direct Debit Guarantee gives them confidence that mistakes will be put right.
That trust works for businesses too: 80% of merchants say the Guarantee makes them more likely to accept Direct Debit. Few payment methods can say their consumer protection is also a commercial advantage.
Where the real gains are
That doesn’t mean there’s nothing to improve. ONS data, drawn from Pay.UK and Vocalink, shows Direct Debit failure rates due to insufficient funds sitting between 2% and 3% in some sectors and edging upwards, as household budgets remain under pressure. Reducing failed collections – through better data, smarter timing of representations and clear communication with payers – is an area we’re committed to helping our clients tackle.
And that’s the point. For many organisations, the biggest gains won’t come from adding a brand-new payment rail. They’ll come from getting more out of the one they already use: optimising how Direct Debit is set up, collected and managed before investing in new rails they may not need yet.
The road ahead
We’ll be sharing more soon on what we’ve been building to make sure our products keep delivering what you need from us – including how new options like cVRP can sit alongside Direct Debit where they genuinely add value.
One thing is certain: Direct Debit isn’t standing still, and neither are we.
London & Zurich – your Direct Debit people.
