Introducing Tink’s Variable Recurring Payments beta programme
Today we’re announcing the beta launch of Variable Recurring Payments for commercial use cases in the UK, together with our partner NatWest. The beta will focus on bringing the speed and transparency of VRPs to bill payments and we’ll be adding more partners over the coming weeks and months.
Tink and NatWest have partnered to beta launch Variable Recurring Payments for commercial use cases in the UK.
VRPs give customers a radically improved way to set up multiple recurring payment mandates.
For merchants, VRPs are helping to reduce fraud cases, fees, operating costs and churn, and instant real-time settlement.
At Tink we’ve been optimistic about the potential of variable recurring payments to change the face of online payments for a long time. In earlier posts we’ve covered how VRPs work in detail, both sweeping and non-sweeping or commercial types, plus the current status and use cases. We’re now excited to share that next to launching an upcoming sweeping product, we’re also working on leveraging the transformative benefits of VRPs for commercial use cases together with NatWest, starting with bill payments.
The rollout of VRPs for sweeping is well underway in the UK and we’re seeing promising industry developments like HSBC launching its own offering last month. But for VRPs to fulfil their game-changing potential, we need to go beyond sweeping and enable commercial VRPs as a better alternative to direct debits. NatWest made its first non-sweeping VRP in May and we’re delighted to be joining forces on one of the first real-world applications of commercial VRPs, working to make bill payments faster and simpler for consumers and businesses.
We’re kicking off this closed beta together with NatWest and will be adding other select banking partners soon. Our teams will be testing commercial VRPs as a more convenient way for consumers to pay their bills, with a view to a full-scale launch in the months to come. If your business is interested in participating, then get in touch.
Users have greater control and visibility when setting up a VRP mandate versus a direct debit
Why VRPs are a game-changer for merchants
On the surface, VRPs function in a similar way to direct debits and other recurring payment types: the customer gives a business permission to collect payments on a recurring basis without the need for additional action. These payment types are popular because, for customers at least, they’re mostly automated and easy to use. But they also require a high degree of trust between the customer and merchant and can cause confusion and friction down the road, since the customer has limited visibility over who they’re paying, what they’re paying, and how long for.
This is where VRPs are radically different. The customer can set up multiple recurring payment mandates that are bound by specific parameters: the merchant, the amount, and the duration. It will be easier for customers to track, manage, and cancel their payments in their banking app too, which will also show the amount that can be drawn from their account and when the mandate ends.
If VRPs are an upgrade on existing alternatives for consumers, we think they’ll be a game-changer for merchants.
Here are some of the key benefits:
Reduced fraud: With a fully embedded SCA step and no need to store sensitive customer data, fraud is virtually eliminated with VRPs.
Instant settlement: Merchants get near-instant access to funds with VRPs, since transactions settle in real-time.
Lower fees and operating costs: Businesses can retain more of their revenue by avoiding card payment fees, and save time and resources by cutting out the operational costs associated with direct debits.
Reduced churn: Credit and debit cards have expiry dates, meaning payments are at risk of failing every 3 years or so leading to increased customer churn. VRP mandates don’t expire unless they’re revoked by the user or merchant.
Next steps: better coverage, more use cases
As the managed rollout of VRPs continues in the UK, there are two important tracks our teams at Tink are working on: our upcoming sweeping product, and the beta programme launching today focused on non-sweeping or commercial use cases.
We’ll have more news on the availability of our sweeping solution soon. In the meantime, we’ll be slowly expanding our beta programme to include more banks and customers through to the end of 2022. While all of the CMA9 either currently support VRPs for sweeping or will soon, it’s fair to say that some UK banks are further ahead than others on commercial VRPs. Over the next few months we’ll be collaborating closely with select banks to help them commercialise their APIs and expand our coverage.
Ultimately, our aim is to be first-to-market with a comprehensive VRP solution that addresses real use cases for merchants. Today we’re focusing on bill payments, tomorrow it will be ecommerce and subscription payments.
If you’re interested in getting early access to our Variable Recurring Payments API and being one of the first to try VRPs, or simply want to learn more, then get in touch.
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