Variable Recurring Payments
Further reading on how to VRPs with Yapily.
Variable Recurring Payments are payments in the UK which the user can configure from an Institution to pay an entity immediately from a single Consent. It allows variable payment amounts to be collected on an ongoing basis and will act as a smarter, flexible version to direct debits. The main difference between VRPs and any other payment is that it only requires the payments service use to provide their authorisation once for multiple payments making it a highly sort after feature in Open Banking.
Current scope of Variable Recurring Payments mandated by the OBIE is limited to the Sweeping services. Sweeping in the current context describes the case when the payer moves the money between two accounts held in their name. For example moving funds from a current account to a savings account or to use excess funds into mortgage account to repay a loan more quickly.
Sweeping has been defined to include a set of use cases. Anything beyond that would fall within the proprietary API space.
- 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
Sweeping capability is mandated for the CMA9 to be made available by July 2022. There will be a managed roll out between now and then as the CMA9 announce they are ready to begin testing with TPPs for Sweeping use cases.
Although the Non Sweeping APIs are not mandated by OBIE, Yapily intends to support this important use case which refers to Non-Sweeping services. Non-Sweeping describes the transfer of funds for business payments for goods and services. Examples include subscription based payments and utility bill payments.
Non-Sweeping pilot is supported by Natwest Bank and would be restricted to certain merchants enabled from Natwest side.
Yapily coverage is planned around a Proof of Concept (POC) offering to initiate and execute domestic variable recurring payments through Experimental API's provided that the Institution supports the following feature in the feature array:
As Experimental API's they are not generally available. Access must be requested through your Customer Service Manager.
Sweeping Variable Recurring Payments
To authorize Sweeping Variable Recurring Payments, certain Control Parameters agreed by the user need to be specified which defines the restrictions and limits for payment orders under that consent:
- periodicLimits (Optional) - Define the applicable period and set multiple limits under a consent by specifying
- totalMaxAmount (Mandatory for Sweeping, Optional for Non-Sweeping) - the currency and maximum amount that can be submitted
- frequency (Mandatory) - the Frequency or Period Type for which the payment limits are applied and can be DAILY, WEEKLY, FORTNIGHTLY, MONTHLY or YEARLY
- alignment (Mandatory) - the Period alignment for which the payment limits are applied and can be based on date of CONSENT creation or aligned with CALENDAR
- maxAmountPerPayment (Mandatory) - Specify the currency and maximum amount that can be submitted per payment
- psuAuthenticationMethods (Mandatory) - Define's the authentication method(s) allowed in payment submission
- validFrom (Optional) - Specify the start date when the consent becomes valid
- validTo (Optional) - Specify the end date when the consent expires and becomes invalid
Apart from the Control Parameters, there is option to specify the Payer or Debtor account details either while making the Authorisation request or while providing the Authorisation consent. Payee or Creditor account details need to be specified either during Authorisation request or while submitting the Payment request, however Natwest have mandated it to be provided during Authorisation request along with Transaction Reference information.
Non-Sweeping Variable Recurring Payments
To authorize Non-Sweeping Variable Recurring Payments, additional Control Parameters need to be specified along with those mentioned for Sweeping services:
- maxNumberOfPayments (Optional and only available for Non-Sweeping) - the Maximum number of payments that can be submitted under a period
- maxCumulativeAmount (Optional and only available for Non-Sweeping) - the Maximum cumulative amount that can be submitted
- maxCumulativeNumberOfPayments (Optional and only available for Non-Sweeping) - the Maximum cumulative number of payments that can be submitted under the consent
Funds Confirmation service
Before executing the Variable Recurring Payments transaction, there is an option to check and confirm availability of sufficient funds in the user's account provided the user has given his or her consent.