Direct bank payments solution provider GoCardless has officially launched its variable recurring payments (VRPs) offering, ahead of the UK Competition and Markets Authority’s (CMA’s) 31 July deadline.
The GoCardless ‘Instant Bank Pay’ feature will now support one-off and recurring transactions through Open Banking.
GoCardless said a sandbox will be made available in the coming weeks for merchants to “test their VRP readiness”.
Instant Bank Pay for recurring payments, will give merchants “a head start” on VRPs as banks begin their rollout.
“We’ve now had hundreds of conversations with businesses across the country and what stands out again and again is their enthusiasm for VRPs – especially that moment when they realise how this new technology can unlock their future growth plans,” Barrigan added.
Open Banking payments network Plaid also revealed it is launching VRP in beta, “to make online payments work better for people in the UK”.
Analysis by Plaid found that extending VRP to use cases beyond sweeping could save UK businesses over £1.5 billion annually in payment processing fees.
In a blog post, Plaid product manager Quan Nguyen and Dan Morgan, policy lead for Europe, wrote: “Expanding the use cases of VRP would allow Open Banking companies like Plaid, to initiate payments on behalf of our customers to other accounts like ecommerce businesses and utility companies.”
“Furthermore, VRP holds massive potential because of its low cost. If VRPs are extended to use cases beyond sweeping, there are no restrictions on how much a bank could charge for these payment types.
“At Plaid, we believe the fees banks charge for VRP payments must be capped at 10 basis points to protect that low cost and make it a truly competitive alternative payment option,” Nguyen and Morgan added.
GoCardless took the first live transaction through a sandbox developed by the Open Banking Implementation Entity in 2019.