Token enters agreement with NatWest to offer VRP for non-sweeping

Open Banking payments platform Token has teamed up with UK bank NatWest Group to offer variable recurring payments (VRPs) for non-sweeping services, as revealed at Open Banking Expo UK in London yesterday (20 October).

The announcement was made by Token’s chief product officer Charles Damen and NatWest Group’s head of Open Banking Dan Globerson during a panel session on the Retail Stage, ‘The new normal in Open Banking: What lies beyond VRPs and sweeping?’.

Damen said: “VRP came through the CMA9 mandate as a compliance element, but the technology can be used for wider applications – the non-sweeping use cases.”

NatWest now has agreements with six payment providers to offer VRP as a new payment method, having been the first bank in the UK to go beyond the Competition and Markets Authority’s (CMA’s) requirement for banks to provide VRP in support of sweeping, where money is automatically transferred between accounts belonging to the same person.

“As a relationship bank for a digital world, we’re committed to offering innovative and convenient payment methods to businesses and consumers,” said Globerson.

“VRP brings greater simplicity, control and flexibility to payments. It’s fast, cost-efficient and uses the very latest in bank API technology.

In May this year, NatWest signed agreements with payment providers TrueLayer, GoCardless and Crezco to begin offering VRPs as a new payment option for businesses and consumers.

Yesterday, in addition to Token, NatWest also signed VRP agreements with Yapily and Tink.

Stefano Vaccino, founder and CEO of Yapily, said: “VRP is the evolution of Direct Debit, standing orders, and card-on-file payments, where the movement of money is quick, cheap, and reliable.

“With NatWest, we are opening up new and exciting Open Banking use cases for our customers and helping to build a healthy payments landscape that works for everyone.”

The first non-sweeping VRP payments were made by NatWest customers to Charity Right, an international charity, and lettings software provider Pink Chilli, and were supported by Charity Right’s integration with GoCardless and by Pink Chilli’s integration with TrueLayer.

Damen added: “What NatWest Group has been doing is very important and is forging a path for other banks to follow. Banks that get involved now will really benefit from these early learnings and have a chance to grow the models they can implement for the new API economy.”

VRP research

Token, which already offers VRP capabilities for sweeping, confirmed it also has plans to make VRP for non-sweeping services available through other UK banks.

Todd Clyde, CEO of Token, called the agreement a “massive development for Token, and for the future of payments”.

“If financial institutions and fintechs work together, we have a tremendous opportunity to create a balanced, practical approach that will deliver on the promise for VRP to enhance consumers’ and businesses’ financial lives,” he added.

“Get it right, and VRP will ignite explosive growth for Open Banking-enabled account-to-account (A2A) payments. I think 2023 will be a very exciting year.”

Clyde delivered the opening keynote at Open Banking Expo UK, during which he revealed some of the main findings from its industry survey report on VRPs.

The report found that industry participants see the three most compelling non-sweeping use cases as subscription service payments, utility bill payments, and one-click e-commerce payments.