UK Finance, supported by Deloitte, has developed a report presenting an industry-led proposal for a sustainable commercial model for Open Banking Payments (OBPs) in e-commerce – also referred to as Wave 2 commercial variable rate payments (cVRP). 

The proposal was developed transparently with input from UK Finance Members and wider stakeholders, adhering to competition law. This involved a structured process, first outlined in the Initial Findings discussion paper, to assess commercial model options. The process included defining a 'value framework' of key criteria for a sustainable commercial model, identifying its possible dimensions, and assessing each option. Quantitative modelling of the payments market and engagement with merchants also ensured the commercial model's impact on consumers, merchants, Payment Initiation Service Providers (PISPs), and Account Servicing Payment Service Providers (ASPSPs) was thoroughly considered.

The proposal includes:

1. Dimensions of the commercial model.
2. Purchase protection
3. Level of the transaction fee

This industry proposal reflects the views of UK Finance, informed by engagement with industry participants, merchants, and other stakeholders. 

No decision or agreement has been reached regarding potential transaction fee levels for cVRP. This report, and the work undertaken in its preparation, are to facilitate discussion only, and further work will be needed to address legal risks associated with potential options and proposals. 

UK Payments Initiative Ltd is expected to use this proposal to inform its decisions on the Wave 2 cVRP commercial model, and the content of the report will be open to any other operator or stakeholder who could benefit from the analysis.