The UK open banking provider TrueLayer partners with the UK debt support app SuperFi to facilitate automated debt repayments using open banking technology.
SuperFi is allowing its users to better manage debt repayments by adopting the variable recurring payment (VRP) open banking technology of its new partner TrueLayer.
The use of VRPs allows users to authorise a series of payments from their bank account at variable amounts as an alternative to card-on-file and direct debit payments.
The application of the technology within the SuperFi app allows users to repay debt in a structured and controlled way without incurring overdraft fees or needing to authenticate transactions.
SuperFi’s platform connects to users’ bank accounts and credit cards to track borrowings and overdrafts in a single interface. Customers can then select and follow personalised plans that help them pay off debt faster.
VRPs are settled and verified immediately using one-time authentication and can be personalised to the customers’ finances.
TrueLayer VRPs use a mandated process known as ‘sweeping’, allowing users to set up automatic fund transfers of different amounts between two accounts that they own on a recurring basis.
For SuperFi and its customers, this will power processes that pay back debts faster and prevent fees. Customers will be able to use VRPs to ‘sweep’ money between bank accounts, averting overdrafts and other penalties.
VRPs can also automatically ‘round up’ purchases to the nearest pound, using the spare change to pay down credit card debt.
Debt management through open banking
The arrival of features like open banking and particularly VRPs is timely given their suitability in addressing the challenges associated with the ongoing economic turmoil.
As inflation has pushed household costs up over the past year, consumer debt has also increased. November 2022 data from the Bank of England disclosed that consumers took out £1.5billion in consumer credit borrowing during that month, with an additional £500million of new borrowing by January 2023.
The spike in debt has left many individuals and families in precarious financial situations. Because of this, 45 per cent of British adults admit to having difficulty when paying essential bills, and about six million people have fallen behind on repayments according to a survey published by YouGov and StepChange Debt Charity in October 2022.
SuperFi’s debt support can ultimately help users alleviate these issues by leveraging opening banking technology, affording its customers both a holistic view of their borrowing and manageable repayment plans.
Recognising the solution’s suitability in the current climate, Tom Barltrop, CEO and co-founder of SuperFi, explains that with so many struggling to repay bills and credit commitments, “the need for early detection and prevention of problem debt has never been more urgent.”
“We are excited to harness the power of VRPs to enable our users to repay their debts faster and avoid unnecessary fees,” comments Barltrop.
Matt Parish, group product manager at TrueLayer, adds: “By eliminating the need to authorise every transaction, VRPs enable people to repay their loans in a way that’s both worry-free and frictionless.
“We’re excited to work with SuperFi to provide a more reliable approach to debt support.”