Variable Recurring Payments (VRPs) are the future of recurring payments in the UK, and we’re devoted to making it as smooth as possible for customers to launch with us. VRPs unlock countless opportunities for consumers to better manage their financial lives, while encouraging companies to build the mechanisms that enable open banking adoption and growth.
Below is a list of frequently asked questions by customers to help you prepare.
If you want to find out more about VRPs in general, you can find more information in our docs and our blog.
Which UK banks support VRP today?
The following banks currently support VRP, providing over 90%+ account coverage.
Institution | Institution ID(s) | Account supported |
Natwest | ins_129441, ins_115643 | Personal, Business |
Royal Bank of Scotland | ins_129442, ins_115642 | Personal, Business |
First Direct | ins_81 | Personal, Business |
HSBC | ins_55, ins_118277 | Personal, Business |
Barclays | ins_118305, ins_59 | Personal, Business |
Nationwide Building Society | ins_60 | Personal, Business |
Santander | ins_62 | Personal, Business |
Danske Bank | ins_117237, ins_118476 | Personal, Business |
Lloyds Bank | ins_118275, ins_128699, ins_61 | Personal, Business |
Halifax | ins_117246 | Personal, Business |
Bank of Scotland | ins_118276, ins_118274 | Personal, Business |
Mettle | ins_126252 | Business |
Monzo | ins_117243 | Personal, Business |
Bank of Ireland | ins_120185, ins_117236 | Personal, Business |
Allied Irish Bank | ins_118509, ins_117238 | Personal, Business |
What’s the difference between sweeping, non-sweeping and commercial VRP? What is in scope of sweeping VRP and available today?
Currently live and available are specific sweeping use cases, which is the automatic movement of funds between two accounts with the same owner. This is often referred to as a me-to-me transaction. The use cases that fit within the scope of sweeping include:
- Intelligent savings: VRPs can encourage savings through sweeping, whereby money automatically moves from an account with excess funds to another current (with higher interest) or savings account. This is perfect for those building Wealth-Tech solutions who offer current or savings accounts, like Moneybox.
- Smart loan and credit repayments: VRPs can also be used to help with overdrafts and loans. This will allow users to automatically pay off their outstanding overdraft in one account from another account with a positive balance. Lenders and credit card issuers can also use Plaid’s data products to select the optimum amounts and timing for users to repay.
- Automated financial goals: End users can set financial goals, and fintech applications (using Plaid’s VRP solution) can automatically transfer funds via sweeping to help end users reach those goals.
Non-sweeping VRPs allow consumers to automatically transfer variable amounts from their account to one held by another entity. Financial regulators in the U.K. have agreed to plans for a mandated Phase 1 rollout of this type of VRP by the third quarter of 2024. This rollout will be limited in its scope to the following use cases only:
- Regulated utilities, covering payments for things like gas, electricity, and telecoms.
- Government services, covering payments for things like council tax.
- Regulated financial services, covering payments for things like mortgages and loans.
You can find more details in our blog here and in the CMA’s letter, but please reach out to our team to talk if you think either type of VRP is a fit for your business.
How do VRPs differ from existing payment initiation transactions?
VRPs work in a very similar manner to one-off payments, both from a Plaid perspective and the bank transfer itself.
For a one-off payment, customers create the link token, specifying the terms of the payment (e.g. amount, currency etc.) and the user will then authorise the payment with their bank. The payment is then processed via Faster Payments.
For VRP, customers will first create the consent parameters for the VRP mandate (further details here). The link token is then created in the same way; the user authorises the VRP consent with the bank and all subsequent VRP payments are processed via Faster Payments. After the consent has been created and authorised, customers can call /payment_initiation/consent/payment/execute
to take the first payment immediately.
For VRP Payments (using the consent) — this is slightly different as the user does not need to be present, and such payments can be executed “automatically” once the VRP consent parameters have been agreed. As part of this we have several mechanisms of protection:
- VRP constraints (e.g. payments cannot be made outside of the agreed consent parameters)
- Aggressive rate limiter (5 payments per consent per minute)
- idempotency_key, which prevents the same payment from being executed multiple times
How long can a VRP mandate be active for?
There is no limit on the maximum valid end date of a payment consent.
Is there an equivalent of the direct debit guarantee for VRPs?
VRP follows the same rules followed by Open Banking payments, with the direct debit guarantee not applying.
Customers are protected under the Payment Services Regulations in relation to unauthorised transactions and where there has been an error in the processing of the payment. This means, except where the payer has acted fraudulently, the payer is not liable for any losses. Please refer to the response to Question 5 for details on how customer complaints are handled.
As part of making a payment, Plaid is able to do a funds confirmation check with the bank before the payment is attempted. If the account does not have sufficient funds, Plaid will notify the client.
What happens if a VRP is attempted and fails? Is there a limit on the number/frequency of collection attempts?
There is not a limit on the number/frequency outside of the consent creation parameters. If a VRP fails, it may be retried.
Plaid will adjust rate limits as required to meet client demand.
Is there a financial portal available to view transactions/balances?
Yes, our payments dashboard provides a comprehensive overview of all payments made via Plaid.
Plaid offers a market-leading dashboard, which supports enterprises with complex team structures, requiring the ability to break-down user management, permissioning, and visibility of key data.
Plaid returns all payment statuses both via a back-end response and front-end layout. On the back-end, you can expect to receive webhooks outlining the statuses of payments (see Payment Statuses below). On the front-end, your team will have access to the Plaid Dashboard, which enables the tracking of specific payments, across a number of fields including:
- Start / End Date
- Payment Reference
- Environment
- Min / Max Amount
- Recipient ID
What happens if the constraint conditions on a VRP are violated? (e.g. above payment limits)
The payment attempt will fail and a PAYMENT_REJECTED
error status is thrown to customers.
What are the payment limits for VRP?
The payment limits for VRP are the same as standard Payment Initiation transactions via Open Banking and will be applied when the payment request is made. If a payment falls outside of these limits, the payment is likely to be rejected by the bank.
For a full list of bank payment limits, please refer to Transaction limits - Pay.UK.
Do we anticipate the initial consent will convert lower than standard Payment Initiation?
The initial VRP consent should convert very similarly to a normal open banking powered Payment Initiation. The steps a user goes through are effectively the same, with the payment consent replaced by the parameters of the consent but the same redirect to the bank etc.
Once the consent is set up, clients can benefit from the increased conversion expected given the ability to skip end users being redirected to the bank.
Will the bank block the consent creation based on the amount?
The bank will not put in place restrictions when the consent is set up.
What happens in the case an end user disputes a transaction?
End users should reach out to the client in the case of any disputes regarding a VRP payment. End users can also contact their bank.