Plaid publishes “Three principles for incentivising the adoption of Variable Recurring Payments (VRPs)”, our second report digging into what VRP means for the future of digital finance.
Variable Recurring Payments (VRPs) have the potential to disrupt the recurring payments market by changing how we manage our subscriptions or pay our utility bills, for example. VRPs offer consumers more control, more choice, and more security compared to direct debits and card payments.
Based on conversations we’ve had with industry stakeholders, from product managers to policymakers, we explore key issues impeding VRP adoption among merchants and consumers. In our report, Three principles for incentivising the adoption of Variable Recurring Payments (VRPs), we chart a path forward, establishing three foundational principles to unlock the potential of VRPs:
- Build based on a push, not a pull payment framework;
- Cap CVRP issuer fees, similar to the interchange fee for cards, and ensure they are free for the consumer;
- Create a thin rulebook for VRPs that is enforced by an industry-agreed entity.
Over the next few months, regulators will explore how to grow the UK’s leadership of open banking, including unlocking the future of open banking payments - such as VRPs - by engaging with industry experts. Plaid’s three principles could provide a starting point for these discussions.