NatWest partners paytechs to offer new payment option via Variable Recurring Payments
NatWest Group has signed agreements with payment providers TrueLayer, GoCardless and Crezco to offer a new payment option via its Variable Recurring Payments (VRP) Application Programming Interface (API).
The “industry first” deal will enable payment providers to give businesses another way to manage customer payments, via the Faster Payments service, meaning transactions can be conducted near instantaneously.
VRPs are the next phase of open banking, mandated by the UK’s Competition and Markets Authority (CMA), and are scheduled to be introduced in 2022.
VRP APIs allow third-party providers (TPP) to initiate a series of payments at variable intervals, enabling the adoption of faster, more efficient and more secure payments.
VRP has “huge potential” for both consumers and businesses, says NatWest Group head of bank of APIs, Daniel Globerson.
VRP offers numerous advantages, including the streamlining of payment journeys, minimising transaction costs and doing away with the compliance issues associated with holding card details on file.
The four-way partnership will mean NatWest will be the first UK bank to go beyond the requirement for banks to provide VRP in support of ‘sweeping’ – the automatic transfer of money between two accounts belonging to the same person.
Customers will also be able to set maximum payment amounts, make instant payment cancellations and, unlike open banking where customers can consent to single payments only, customers can consent to recurring payments being taken from their account.
TrueLayer senior product partnership manager Jana Reid says: “There is so much potential that can be unlocked with VRP to deliver value for consumers and businesses.”
GoCardless chief product officer and chief growth officer Duncan Barrigan says: “VRPs will be a game-changer for businesses and consumers alike.
“From sweeping, which will help us make our money work harder without the hassle, to use cases beyond ‘me-to-me’ where merchants can take advantage of this digital-first, cost-effective payment method, VRPs will make ‘account-on-file’ the next big trend in payments.”
NatWest, having developed its VRP API ahead of schedule, was the first of the nine largest UK banks to conduct VRP transactions in a live environment, as opposed to a sandbox.