Variable Recurring Payments(VRP) is a new form of payment instruction that will be built into the Open Banking system, enabling customers to connect trusted TPPs with their bank account using secure channels. VRPs, meanwhile, give much greater flexibility and control compared to regular Direct Debits or standing orders, allowing payments of varying amounts at irregular intervals with no need for the customer to authenticate every transaction.
This is typically referred to as a vehicle routing problem (VRP), and there are two main types
Sweeping (Me-to-Me): The automated movement of money between a customer’s own accounts – for example, rinse a surplus of cash into a high-interest savings account or top up balances to avoid paying overdraft fees.
Commercial (Non-Sweeping): Commercial use of VRP, such as for utility bills or subscriptions, offers a quicker and clearer alternative to card-on-file payments.
These VRPs deliver more secure “one-click” checkout experiences using secure APIs and let the user specify maximum payment limits that can be canceled, in seconds, via their banking app.