Fintech leaders have predicted a surge in the use of open banking after the deadline for variable recurring payments (VRPs) passes.
UK banks have until 31 July 2022 to implement sweeping – or the automatic transfer of money between two accounts owned by the same person.
Initially, banks had been given until the end of January 2022 to implement the changes, but this deadline was extended by the Competition and Markets Authority (CMA) in November.
“This week’s VRP deadline marks another important milestone for open banking, and is only going to increase its uptake and integration further,” said Brian Hanrahan, chief executive of payment processing firm Nuapay.
“VRP increases the proportion of the market which will benefit from the positive competitive forces unlocked by open banking payments, but what we have today based on the limited sweeping perimeter of the CMA’s VRP mandate does not go anywhere near far enough to fulfil that potential for the wider economy.
“We would welcome continued attention from regulatory authorities to initiatives like VRP in order to facilitate greater competition and innovation in the marketplace.”
Meanwhile, Siamac Rezaiezadeh, director of product marketing at UK fintech GoCardless, has described the VRP deadline as “the dawn of a new era in open banking.”
“While those of us in the fintech world are keenly aware of the opportunities opened up by this milestone, the rest of the world has cause for celebration as well,” he said.
“After all, VRPs will be a game-changer for businesses and consumers alike… If you’re a business, think supercharged savings. Stronger security. Unrivalled reliability. If you’re a consumer, think instant payments. Automated transfers. Peace of mind.”
However, Rezaiezadeh cautioned that the introduction of VRPs will take time.
Earlier this week, GoCardless launched its own VRP offering to support one-off and recurring transactions through open banking.