Unlocking the UK B2B Payments Revolution: Why Early-Stage Fintechs and Banks Are Poised to Capitalize on cVRPs

The UK's B2B payments landscape is on the cusp of a seismic shift. As commercial Variable Recurring Payments (cVRPs) gain regulatory momentum, they are positioned to disrupt the dominance of commercial cards by offering a faster, cheaper, and more flexible alternative. For investors, this represents a high-reward opportunity to back early-adopter fintechs and banks that can capitalize on this transformation. Let's dissect the catalysts, risks, and investment angles to consider.

The Regulatory Tailwind: Phase 1 Launch and Beyond

The UK's Financial Conduct Authority (FCA) has fast-tracked cVRPs through its Phase 1 rollout, set for Q3 2025. This phase targets “low-risk” use cases such as utility payments, government transactions, and charity donations. By standardizing the Multilateral Agreement (MLA)—a framework governing liability, pricing, and technical integration—the FCA aims to eliminate fragmentation and enable seamless cross-platform payments.

Crucially, Phase 2, expected by 2026, will expand cVRPs to high-risk sectors like e-commerce. This phased approach mitigates risks while creating a runway for early adopters to build scalable solutions. For instance, Adflex, a B2B payments provider, is already piloting cVRP integrations for recurring subscriptions, leveraging its API infrastructure to reduce administrative costs by up to 40%.

Cost Efficiency: Why cVRPs Outperform Commercial Cards

Commercial cards dominate B2B payments due to rewards programs and extended terms. However, cVRPs offer a compelling alternative:
- Lower fees: cVRPs bypass card interchange fees, reducing transaction costs by 30–50%.
- Real-time settlement: Payments settle within one working day, eliminating delays inherent in card networks.
- Flexibility: Recurring payments can be adjusted dynamically, ideal for variable service contracts.

Tink, a Swedish fintech with a growing UK presence, is well-positioned to benefit. Its open banking API platform already serves 1,500+ clients, and its partnership with NatWest to integrate cVRPs positions it as a key enabler of the MLA framework.

First-Mover Advantage: Who to Watch

1. Tink (TINK.ST):
2. Why invest?: Its API-driven ecosystem is core to cVRP infrastructure.

3. Risk: Competes with larger players like Revolut and Wise.

4. NatWest (NWT.L):

5. Why invest?: As a leading UK bank, it's a founding member of the MLA and benefits from cVRPs' reduced operational costs.

6. Risk: Legacy systems may slow adoption.

7. Adflex:

8. Why invest?: Early leader in B2B cVRP use cases, with a focus on SMEs.
9. Risk: Private equity, so liquidity is limited.

Risks to Monitor

• Technical execution: Banks like NatWest must invest in API upgrades to meet MLA standards.
• Adoption rates: Businesses may resist switching from entrenched card systems.
• Regulatory overreach: Overly prescriptive MLA terms could stifle innovation.

The Scalability Edge: Post-2026 Expansion

The real prize lies in Phase 2, where cVRPs could penetrate the £1.2 trillion UK B2B e-commerce market. Firms like Adflex and Tink, with modular platforms, can rapidly expand into this space. Meanwhile, NatWest's market share in SME banking gives it a customer base primed for cVRP uptake.

Investment Thesis: Go Early, but Stay Selective

cVRPs are a “winner-takes-most” market. Early adopters with robust tech and strategic partnerships will dominate, while laggards face margin erosion. Investors should prioritize:
1. MLA participants with proven API integration capabilities.
2. Cost-conscious firms able to scale without overleveraging.
3. Focus on recurring revenue streams tied to cVRP adoption rates.

The 2026 inflection point—when e-commerce cVRPs launch—will be critical. Those who invest now in pioneers like Tink and Adflex could reap outsized rewards as the sector matures.

Final Take

The UK's cVRP revolution isn't just about technology—it's a structural shift toward efficiency in B2B payments. While risks persist, the regulatory tailwind and cost advantages of cVRPs make this a compelling long-term bet. For investors willing to take a calculated risk on early-stage players, the rewards could be transformative.

Act now, but choose wisely—the race for B2B payment dominance is on.