Creating variable recurring payments

Further reading on how to create VRPs with Yapily.


The Variable Recurring Payments(VRP) feature is available as a Private Beta version. Please contact your Customer Success Manager if you would like to access it.

Introduction

Variable Recurring Payments are payments in the UK which the user can configure from an Institution to pay an entity immediately from a single Consent. It allows variable payment amounts to be collected on an ongoing basis and will act as a smarter, flexible version to direct debits. The main difference between VRPs and any other payment is that it only requires the payments service user to provide their authorisation once for multiple payments making it a highly sort after feature in Open Banking.

Scope

Current scope of Variable Recurring Payments mandated by the OBIE is limited to the Sweeping services. Sweeping in the current context describes the case when the payer moves the money between two accounts held in their name. For example moving funds from a current account to a savings account or to use excess funds into mortgage account to repay a loan more quickly.

Sweeping has been defined to include a set of use cases. Anything beyond that would fall within the proprietary API space.

  • Sweeping between current account providers, including to move funds between current accounts to avoid falling into overdraft on another current account.
  • Sweeping to destination accounts which are used for unbundling overdrafts from a current account and other alternative forms of credit that closely compete with overdrafts.
  • Sweeping to destination accounts which are used for loan repayments as part of a service that provides alternative forms of credit to an overdraft.
  • Sweeping to a credit card account.
  • Sweeping to cash savings accounts that are capable of paying interest
  • E-money accounts that are used by consumers and SMEs as substitutes for current accounts alternatives to savings accounts

Excluded use cases

  • Sweeping to make e-commerce purchases (including sweeping money to an e-money “me-to-me-to-business” account, in order to purchase goods or pay for services or pay for utility bills)
  • Sweeping to destination accounts used for the purchase of cryptocurrency
  • Sweeping in order to use online gambling and gaming services.
  • Sweeping to destination accounts used for foreign exchange or international money transfer services.
  • Investment products (including pensions) that may be used by consumers as alternatives to savings accounts

Sweeping capability is mandated for the CMA9 to be made available by July 2022. There will be a managed roll out between now and then as the CMA9 announce they are ready to begin testing with TPPs for Sweeping use cases.

Non-Sweeping Pilot

Although the Non Sweeping APIs are not mandated by OBIE, Yapily intends to support this important use case which refers to Non-Sweeping services. Non-Sweeping describes the transfer of funds for business payments for goods and services. Examples include subscription based payments and utility bill payments.

Non-Sweeping pilot is supported by Natwest Bank and would be restricted to certain merchants enabled from Natwest side.

Coverage

Yapily coverage is planned around a Proof of Concept (POC) offering to initiate and execute domestic variable recurring payments through Experimental APIs provided that the Institution supports the following feature in the feature array:

  • INITIATE_DOMESTIC_VARIABLE_RECURRING_PAYMENT_SWEEPING
  • CREATE_DOMESTIC_VARIABLE_RECURRING_PAYMENT_SWEEPING
  • INITIATE_DOMESTIC_VARIABLE_RECURRING_PAYMENT_NONSWEEPING
  • CREATE_DOMESTIC_VARIABLE_RECURRING_PAYMENT_NONSWEEPING
  • VARIABLE_RECURRING_PAYMENT_FUNDS_CONFIRMATION

As Experimental APIs they are not generally available. Access must be requested through your Customer Success Manager.

Sweeping Variable Recurring Payments

To authorize Sweeping Variable Recurring Payments, the user specifies some control parameters which define the restrictions and limits for payment orders under that consent.

Users can specify:

  • the start and end date of the consent
  • periodic limits which define how frequently payments may be taken, for example each week or each year

Users can also control the value of payments taken by specifying:

  • a maximum amount per periodic limit
  • a total maximum payment per consent

Apart from the control parameters, the user can optionally specify the payer (or debtor) account details, either when making the authorisation request or when providing the authorisation consent.

Payee (or creditor) account details need to be specified either during the authorisation request or when submitting the payment request. Natwest, however, require that the payee account details are provided during the authorisation request, along with transaction reference information.

Non-Sweeping Variable Recurring Payments

To authorize Non-Sweeping Variable Recurring Payments, the user needs to specify the same control parameters as for Sweeping VRPs. Some institutions support further limits specific to non-sweeping use cases.

Funds Confirmation service

Before executing the Variable Recurring Payments transaction, there is an option to check and confirm availability of sufficient funds in the user's account provided the user has given his or her consent.