Variable Recurring Payments CMA
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GoCardless and Plaid Gear Up for VRPs as the CMA’s Mandate Comes Into Force This Weekend

GoCardless, a provider of direct bank payments, and the open banking platform Plaid have both introduced separate variable recurring payments (VRP) offerings, which is set to enable developers and financial service providers to prepare for VRPs as the Competition and Markets Authority (CMA) sweeping deadline comes into place this weekend. 

GoCardless’ ‘Instant Bank Pay’ feature will now support one-off and recurring transactions through the applied use of open banking.

As outlined in the company’s recently published developer documents, a sandbox will be unveiled in the coming weeks for merchants to test their VRP readiness; as banks gear up to begin to introduce the new technology to the public.

The news comes as the new UK-based immigrant credit fintech platform Pillar becomes the latest early adopter to choose GoCardless to power its payments for a new and more inclusive era of credit across the globe.

Pillar, which raised a pre-seed round of £13million ($16.9million) led by Global Founders Capital and Backed VC earlier this year, will use the GoCardless platform for direct debit and VRP leveraging its multi-currency, multi-jurisdiction bank payment network.

Pillar is developing a new financial platform with the ambition of providing immigrants with access to credit products when moving to a new country. By offering VRPs as a key part of its payment functionality, Pillar will afford customers the ability to set payment parameters and make and cancel recurring payments instantly.

The use of VRPs will allow them to authenticate recurring payments through their banking services, eliminating the need to re-authenticate or re-authorise every transaction.

VRPs allow a third party to initiate recurring payments from a person’s bank account on a continuous, usually monthly basis. Third parties could pertain to subscription service providers or bill payments for example.

Duncan Barrigan, chief product officer and chief growth officer at GoCardless
Duncan Barrigan

Speaking on the company’s “delight” at giving merchants a headstart on VRP adoption, in tandem with the banks’ scheduled rollout this weekend, through the launch of its instant bank pay feature, GoCardless’ chief growth officer, Duncan Barrigan, revealed that the company has been engaging in “hundreds of conversations with businesses across the country,” citing a recurring theme throughout this dialogue to be “enthusiasm for VRPs.”

The company’s June 2022 report would appear to confirm Barrigan’s statement, as the survey highlighted how a majority proportion of UK consumers are ready to embrace the technology to find better ways to manage their money, with convenience and ease at the top of their wish lists.

Barrigan emphasises the benefit of this technology to companies looking to grow and scale, adding, “A great example is Pillar, with its mission to break down credit borders and unlock access to financial products around the world.

“By tapping into our unique combination of direct debit and VRP, Pillar can customise its payment strategy and take advantage of all the benefits of direct bank payments, from lower fees to greater reliability.”

Adding to these initial thoughts, Ashutosh Bhatt, CEO of Pillar, confirmed the immigrant fintech’s “big plans and global ambitions,” while it addresses the way people gain access to credit.

“Our vision requires a partner that is at the forefront of payments around the world, and that’s why we’re delighted to team up with GoCardless,” continues Bhatt.

“We’re especially excited about their introduction of VRPs,” which Bhatt describes as the first “genuine real-time payment mechanism which will give our customers more clarity and control over their payments.”

The arrival of these new services is timely. Not only is the announcement in-line with the imminent bank-wide rollout, but GoCardless has also been an active participant in the emerging VRP space since about 2019, when it took its first live transaction through a sandbox developed by the Open Banking Implementation Entity (OBIE).

Also working within the same space is the European open banking platform TrueLayer, which has demonstrated the capabilities of VRPs for both non-sweeping and sweeping use cases through the use of a single application programming interface (API).

Back in December 2021, the open banking platform initiated its first open banking VRP transactions with NatWest. The transactions, set in a live environment rather than a sandbox, proved that VRP was working as intended well before their official introduction this weekend.

Now on the eve of the CMA’s mandate, the open banking platform Plaid has announced that it is launching its VRP in beta to make online payments work better for people in the UK, while also predicting that the technology could go on to save UK businesses over £1.5 billion annually in payment processing fees.

Then in June, GoCardless was selected by NatWest to provide VRPs as a new payment option for businesses and consumers, in addition to launching a ‘non-sweeping’ VRP pilot with NatWest and Charity Right.

The launch of recurring payments for Instant Bank Pay means GoCardless will enable multiple companies in the financial sector, such as Pillar and less recently Nude, to use VRPs to provide account-to-account payments.

The big weekend

Siamac Rezaiezadeh, director of product marketing at GoCardless
Siamac Rezaiezadeh

This Sunday, the CMA’s deadline for VRPs and sweeping is set to come into effect. Its VRP mandate ensures that the UK’s nine largest banks must support sweeping by 31 July 2022.

Siamac Rezaiezadeh, director of product marketing at GoCardless, believes this is a pivotal moment for the payments industry, businesses, and payers.

“The CMA deadline has arrived, marking the dawn of an exciting new era in open banking. While those of us in the fintech world are keenly aware of the opportunities opened up by this milestone, the rest of the world has cause for celebration as well,” comments Rezaiezadeh.

“After all, VRPs will be a game-changer for businesses and consumers alike… If you’re a business, think supercharged savings. Stronger security. Unrivalled reliability. If you’re a consumer, think instant payments. Automated transfers. Peace of mind.”

Although Sunday’s rollout is highly-anticipated among all those who love open banking, Rezaiezadeh emphasises how “VRPs will take time.”

“As banks begin their rollout, we’ve also been developing a unique bank payment network that gives businesses access to a range of account-to-account payment methods, from direct debit to VRPs, on a single platform,” he continues.

Through its adoption of GoCardless’ latest features, Rezaiezadeh confirmed that “Pillar can grant its customers greater control over their payments through VRPs while still providing payment options for all consumers as the industry rollout continues.”


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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