Variable recurring payments

Further reading on how to create VRPs with Yapily.

Introduction

Variable Recurring Payments (VRPs) enable payments of variable amounts on an ongoing basis, in line with limits agreed by the end user, without needing to collect their consent for every payment.

The main difference between VRPs and any other payment is that it only requires the end user to provide their consent once for multiple, varying payments.

Scope

The current scope of VRPs is mandated by the OBIE and is limited to sweeping services.

Sweeping in the current context describes the case when the payer moves funds between 2 accounts both held in their name. For example, moving funds from a current account to a savings account or to move excess funds into a mortgage account to repay a loan more quickly.

Included use cases

• 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

Authorisation

Sweeping VRPs

When authorising sweeping VRPs, the end user specifies 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
• the value of payments taken by specifying:
  • a maximum amount per periodic limit
  • a total maximum payment per consent

Payee (or creditor) account details need to be specified either during the authorisation request or when submitting the payment request.

Yapily Connect customers also need to specify the payer details in the authorisation request to meet compliance requirements.

Non-sweeping VRPs

To authorize non-sweeping VRPs, 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 VRP transaction, there is an option to check and confirm the availability of sufficient funds in the user's account using the confirm funds endpoint.

The user must have given their consent before completing this check.

Institution Specific Capability

Where an institution has limitations in its VRP behaviour, or otherwise has non-standard capability, this is detailed below:

Sweeping

Compliance requirements

VRPs are considered to be an ongoing relationship with the end user, meaning there are extra Know Your Customer (KYC) and transaction monitoring obligations on Yapily Connect Ltd.

As a result, Yapily Connect customers using Yapily Connect's PIS license for VRPs are required to provide extra fields about the end user who is making the payment.

You must provide the payer details in the complianceData object when creating a VRP authorisation request. The required details vary depending on if the payer is an individual or business.

...
"complianceData": {
    "payer": {
        "type": "INDIVIDUAL",
        "individual": {
            "name": "John Doe",
            "birthDate": "2000-08-12"
        }
    }
}
...

...
"complianceData": {
    "payer": {
        "type": "BUSINESS",
        "business": {
            "name": "Company LTD",
            "registrationNumber": "COM123NO",
            "registeredAddress": {
                "addressLine1": "123 Queens Street",
                "addressLine2": "Unit 13",
                "townName": "York",
                "postCode": "12345",
                "country": "GB"
            },
            "tradingAddress": {
                "addressLine1": "123 Queens Street",
                "addressLine2": "Unit 13",
                "townName": "York",
                "postCode": "12345",
                "country": "GB"
            }
        }
    }
}
....

Note: Customers with their own PISP license don't need to provide these extra fields.