Three principles for driving the adoption of Variable Recurring Payments (VRPs)

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Front cover of Three Principles for driving Variable Recurring Payments (VRPs) adoption

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:

  1. Build based on a push, not a pull payment framework;
  2. Cap CVRP issuer fees, similar to the interchange fee for cards, and ensure they are free for the consumer;
  3. 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.

We have a unique opportunity to drive the adoption of VRPs as an alternative payment method to direct debits and card payments in the UK. However, we need industry leaders to come together on some of the biggest open questions –and quickly– so we can build payments that work better for merchants and consumers across the UK.
Dan Morgan, Europe Policy Lead at Plaid

Plaid is an open banking network that powers digital financial experiences. Over 7,000 apps and services and many of the largest banks use Plaid to make it easy for their customers to onboard and fund digital financial accounts from over 12,000 financial institutions across North America and Europe. The company was founded in 2013 and is headquartered in San Francisco, with additional offices in Amsterdam, London, New York, Salt Lake City, Toronto, and Washington, D.C.