UK-based social lender Moneyline has issued its first loan that will be repaid using variable recurring payments (VRPs) delivered by Open Banking platform Ordo.
By offering VRP as a repayment option, Moneyline will be able to reduce the amount of interest borrowers pay in real terms.
With interest calculated daily, paying off a portion of the balance sooner when funds are available, which VRPs allow individuals to do, results in lower interest payments overall, according to Moneyline.
Ordo’s VRP solution has been adopted by Moneyline, which provides access to affordable credit and “flexible” financial services, in an extension of their existing partnership.
Since 2021, Moneyline has partnered with Ordo for ‘Request to Pay’ Open Banking services.
Moneyline has begun a three-year trial to assess how effective VRP is at expanding access to financial services to individuals.
Craig Tillotson, chief executive officer of Ordo, (centre in main image) said: “Open Banking variable recurring payments are set to transform payment options in 2024 and Ordo’s fully hosted end-to-end service is market leading, both in terms of the value it provides and its ease of implementation and management.
“The novel consumer-focused credit solution Moneyline is providing with our VRP service is just the start. Later this year, under the guidance of the UK regulators we will be extending our service across the whole finance sector, as well as into energy, water, telecoms and government payments.”
He added: “It’s particularly exciting to be starting this journey supporting Moneyline to drive greater financial inclusion and customer empowerment from VRP.”
Moneyline also pointed out that VRP has the potential to “boost” a customer’s digital footprint, which in turn, can enable greater participation in automated products and services.
“We are very excited to be able to offer VRP to our customers who are often excluded from products and services as they struggle making payments on the same day each month,” said Shiona Crichton, chief executive officer of Moneyline.
“Working with Ordo, who are focused on offering customers solutions that work for them, has made this process simpler as they have a deep knowledge of the payments systems in the UK.”
Ordo was co-founded in 2018 by the former management team behind Faster Payments.
Main image L-R: Ordo founding team – Mike Banyard, co-founder and chief technology officer; Nick Caplan, chair and co-founder, Craig Tillotson, co-founder and chief executive officer; Fliss Berridge, co-founder and director; and George O, co-founder and chief operations officer.
Further reading: Aero Commerce partners with Ordo