Payit by NatWest successfully makes its first Variable Recurring Payment
NatWest’s multi award-winning open banking payments solution Payit, has successfully made its first Variable Recurring Payment (VRP) in a live environment.
The development marks another significant achievement for NatWest – becoming the first UK Bank to successfully make a VRP using a bank-owned Open Banking payments proposition, in addition to already being the first UK bank to launch an open banking payments solution, and the first bank to enable businesses to send money to their customers without requiring their bank details.
James Hodgson, head of Payit said: “This marks a pioneering milestone for the development of this functionality. The achievement is a major step as it proves Payit’s solution works in a live environment, rather than a testing sandbox.
“VRP is a turning point for Open Banking. It is set to revolutionise the way payments are made online and will look to replace current traditional payment methods such as Direct Debit and Card on File in the future. VRP introduces a mechanism to authorise future payments within pre-agreed limits, meaning consumers can benefit from a new level of payment automation, while experiencing greater transparency and control over their finances.
“As an early adopter of the new payment method, we are seeing a lot of excitement in the industry, with many customers contacting Payit about VRP. Our pilot in Q2 will provide the opportunity to perfect the proposition for a future customer roll out, ensuring the best possible experience can be provided for both businesses and consumers.”
Payit plans to pilot their VRP functionality in a live customer environment with NatWest Rapid Cash in the first half of 2022, with plans to scale to a commercial product ready by early 2023.
The achievement follows Payit’s success in November 2021 when it was awarded the ‘Subscriptions Award’ at the first-ever global VRP Hackathon, hosted by Ozone, which demonstrated how open banking can transform personal and business payment experiences.
Hodgson continued: “In the long run this enables Payit to offer VRP to commercial customers, to help them provide their customers with a seamless payment experience while enhancing the range of functionality already offered by Payit, as an ecosystem of open banking products.
“As the VRP market matures and innovates and use cases evolve, VRP could start to replace card on file or Direct Debit payments.”
What is VRP?
Variable Recurring Payments (VRP) are a novel Open Banking payment method which enable consumers to authorise third party providers, such as Payit, to initiate payments directly from their bank account on an on-going basis.
Open banking payments currently require authorisation for each single payment. VRP introduces a mechanism to authorise future payments within pre-agreed limits, meaning the consumer can benefit from a level of payment automation whilst experiencing greater transparency and control over some more traditional payment methods.
The CMA 9 are mandated to make VRP APIs (Application Programming Interface) available for sweeping, which will enable the more efficient transfer of funds between a consumer’s own accounts, and are set to revolutionise the way payments are made online.