7 common questions about Variable Recurring Payments

How do Variable Recurring Payments work?

What is sweeping?

Why are VRPs being introduced?

How do consumers give secure consent for VRPs?

Figure 1. VRP Customer Journey, source: VRP Proposition Consultation Paper 2020

How similar are VRPs to Direct Debits and standing orders?

  • The payment needs to be initiated by the business, on receipt of the customer’s direct debit instruction.
  • There is no protection for the business if the payer’s account has insufficient funds or has been closed or cancelled.
  • Standing orders are considered safer for the merchants but less safe for customers — from the moment a payment has taken place, there is nothing the customer can do.
  • The failure rate can vary depending on the industry and it can take up to a month for a customer to be informed that the payment didn’t go through.
  • The customer needs to be involved in the process of changing the amount or frequency of the payments.

A VRP use case

What are the main benefits of VRPs?

  • Safety. Increased automation reduces the requirement for manual work , and the risk of human error in payment processing.
  • Security. With no need for bank cards, no card details need to be stored, so there’s no sensitive information for hackers to steal. By using the banks’ APIs these payments will be conducted through safe interfaces. The customer will be able to set preferences on the amount and time of the payment. Businesses will not have to worry about relevant compliance, data breaches, or high card payment fees.
  • Speed. VRPs and sweeping take less time to process than regular card payments, and make it super easy to process payouts and refunds. The movement of funds between accounts is done instantly and securely without human intervention. Additionally, cancelling a VRP is less complex and less time-consuming than cancelling recurring payments from a Direct Debit.

What’s next for VRPs?

--

--

--

Citizen enables instant, cardless, account-to-account payments via their payment solution platform, PayBlox. https://paywithcitizen.com

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

What Businesses Can Learn From Bunnies

The World’s First “Fash Loan”

Purpose At Work: How Gilead Sciences Inspires Behavior Change Through Social Impact

Do You Qualify For ERTC? Watch This Short Tax Credit Video To Find Out

Do You Qualify For ERTC? Watch This Short Tax Credit Video To Find Out

Miracle Technologies Inc. IT Support

It Takes Two: Effectively Leveraging Outside Counsel

The Future of Grocery Delivery — Predictions based on My Experience as a Shopper for Shipt and…

Truecaller’s Growth Machine

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Citizen

Citizen

Citizen enables instant, cardless, account-to-account payments via their payment solution platform, PayBlox. https://paywithcitizen.com

More from Medium

Affise Hires a New VP of Sales to Scale Towards $50M ARR and Beyond

Hop on the spaceship and join the Banking 4.1 movement

IWD 2022: Sonam Motwani, a Unicorn on many fronts