Variable recurring payments for train operators: a better way for passengers to pay

Previously out of scope, Variable Recurring Payments (VRP), AKA Bank on file, is going to be available for train operators later in 2025.

In this article, we’ll explain how train operators can take advantage of VRP by outlining the upcoming changes and the benefits.

As a reminder, what is VRP?

VRP is a payment method that lets people set up regular and repeat payments of different amounts. It's built on the same technology that powers Pay by Bank

If that sounds familiar, it’s because VRP, otherwise known as Bank on file, combines the benefits of similar existing payment methods like card-on-file, direct debit and standing orders. But it also gets rid of the drawbacks of those outdated payment methods, including lengthy set-up processes and slow settlement times.

Thanks to immediate settlement, greater consumer control, improved payment matching (meaning fewer misdirected payments) and greater merchant visibility, VRP represents the next generation of recurring payments, offering speed, flexibility, security, and efficiency.

So, what are the changes that are making this possible, why are they important, and what does it mean for train operators?

Buying a train ticket using VRP

For a real deep dive into the upcoming changes, read our article on why 2025 is key for VRP. But, in short, recurring payments have so far been limited to me-to-me payments, as in a payment from one account to another where both those accounts belong to the same person. An example of this is moving money from your current account to your savings account, also known as sweeping.

However, this is changing. Expanding VRP beyond sweeping was confirmed in a second FCA announcement earlier this year. This change will see consumers being able to make recurring payments to buy train tickets, along with other goods and services.

Why is this exciting?

1. Train operators can offer their passengers a superior booking experience time and time again

With one-click checkouts, passengers will experience a frictionless booking experience each time they buy a ticket. Rail travel is expected to grow by an average of 1.6% annually over the next three decades, which is the equivalent to a 20% increase in rail usage by 2035. This means incremental improvements to the overall customer experience are important, and this starts before that passenger ever steps foot on the train.

2. Offer passenger dynamic ticket pricing options

VRP will allow passengers to authorise payments up to a pre-agreed limit per week or month, with the exact fare for each journey being automatically deducted based on the time of travel or route taken. This alleviates the need to manually purchase tickets for single journeys. As an example, this would make the process of purchasing fixed period season tickets much smoother.

3. Cost savings can be reinvested into funding loyalty programs to drive user retention

With VRP, there are fewer intermediaries than card payments, meaning fewer parties taking a fee. Plus, VRP minimises other costs associated with managing payments, from chargebacks to fraud. This means you can achieve significant cost savings and invest these savings into programs to drive repeat spend and customer loyalty.

We have seen examples of train operators adopting such programmes, including LNER Perks, GWR Rewards, Club Avanti and SWR Rewards. The more rewards offered to passengers, the more likely they are to move from booking platforms to your site.

4. Combine VRP with instant refunds or data

We know refunds are an integral part of booking a train journey, whether it’s a customer choosing to cancel their journey, or automatic delay repay compensation. Refunds can go from taking days to taking seconds with TrueLayer, which will help you drive retention and further enhance your customer loyalty proposition. Additionally, by combining open banking data-enabled products with payments, you can verify the identity of the recipient, which will reduce the scope for fraud or manual errors.

Stay up to date with VRP and Bank on file

If you’re ready to jump on board the VRP train, reach out to speak to one of our payment experts today.