HSBC UK has launched sweeping Variable Recurring Payments (VRPs) to its personal and business customers that participate in or wish to use Open Banking services.
HSBC first to launch UK VRPs
VRP allows businesses and consumers to use open banking for recurring payments of varying amounts, without the need to re-authenticate every transaction.
HSBC says that this announcement makes it the first bank to complete the managed rollout process overseen by the UK’s Open Banking Implementation Entity (OBIE).
“Sweeping VRPs allow for the automated movement of funds between a customer’s own accounts without the need for any manual intervention once the initial consent is setup,” explains George Miltiadious, head of Open Banking Channel Management at HSBC.
“This service can, for example, be used to pay off a monthly credit card bill, move money regularly into a savings account, or to reduce an overdraft balance.”
The Competition and Markets Authority set a 31 July 2022 deadline for the UK’s nine largest banks to support VRP for sweeping, or ‘me-to-me payments’.
Evolution of VRPs
The latest news about HSBC follows similar announcements from Yapily, GoCardless, and Plaid. Open Banking platform TrueLayer has also introduced access to its VRP API for sweeping and non-sweeping payments, subscriptions, utility bills, and more.
VRPs have been designed to ensure it maintains the central ethos of Open Banking of the customer being in control. They will be able to ask the third-party providers (TPP) to cancel the recurring payments at any time. They will also be able to ask their bank to remove the TPP’s access, as an additional way to cancel.
Given the benefits to consumers and businesses including subscription businesses, telcos, and utility firms, the belief is that the regulatory and market developments will unlock this functionality.
“HSBC has embraced Open Banking as an opportunity to innovate and bring the best services and products to our customers,” adds Miltiadious.
“We’re looking forward to working with third party providers to drive sweeping adoption for the benefit of consumers across the UK.”
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