UK-based ethical lender Plend has partnered with Open Banking provider GoCardless to offer variable recurring payments (VRPs) via the latter’s Instant Bank Pay feature. As it aims to provide customers with increased flexibility over loan repayments, Plend is set to leverage VRPs alongside GoCardless Direct Debit to offer customers more payment choices.

Variable recurring payments and collaboration details As per the information detailed in the press release, the flexible nature of VRPs is set to enable customers to change their payment schedule so that it suits their financial situation in an easy manner. As VRPs provide instant payment confirmation and facilitate money movement in a more expedited manner than Direct Debit, they also offer customers an up-to-the-minute view of their finances and help decrease the incidence of late payments. On the back end, VRPs are to contribute to the reduction in the number of manual tasks for the operations team, as more routine work is automated, with the announcement exemplifying the instance of creating new mandates when customers want to change either their loan value or repayment period.

The automation enables Plend’s customers to make changes to their payments at any time, tapping into features of the likes of payment holidays and interest rate freezes with no additional wait times. Commenting on the announcement, Jamie Pursaill, co-founder, and Chief Technology Officer at Plend advised that the company is looking forward to adopting VRPs and making loan repayments ‘truly tailored’ to each customer, especially in the context of the cost-of-living crisis. In addition to simplifying the process, the company can leverage VRPs to increase its responsiveness to customers who are missing payments or are in financial difficulty, reaching them in an expedited manner and enabling them to come to a resolution sooner.

Furthermore, as per the spokesperson’s statement, the company will also have the option to pass on the saving from its efficiency gains to its customers in the form of lower APRs. Adding on this, Pat Phelan, UK MD and Chief Customer Officer at GoCardless advised that the company is looking forward to supporting Plend as they expand financial inclusion through smarter credit decisioning and introduce VRPs to provide increased flexibility for their customers. VRPs capabilities A new form of payment powered by Open Banking, VRPs, similar to Direct Debit payments, enables organisations to collect payments from a customer on a recurring basis, without asking for permission each time.

VRPs are believed to be a great payment option when there’s a need for increased speed, transparency, and control, as they provide instant payment confirmation, as opposed to the two- to three-day wait with Direct Debit. Furthermore, with Direct Debit, users have visibility only over the mandate and the last amount taken, and the payment had to be cancelled or amended in advance. VRPs enable users to manage their mandate and payment parameters within their banking app, and they can also be cancelled or amended up to the moment prior to the payment being taken.

GoCardless and VRPs As per the press release, GoCardless has been activating within the VRP space from 2019 onwards, when it took the first live transaction through a sandbox developed by the Open Banking Implementation entity. In May 2022 it became one of NatWest Group’s VRP providers, and in June 2022 it launched a ‘non-sweeping’ VRP pilot with NatWest and Charity Right. GoCardless provides VRPs via its account-to-account (A2A) payment platform, which covers Direct Debit and Open Banking payments alike to companies in the financial services sector such as Pillar and Nude.

For more information about GoCardless, please check out their detailed profile in our dedicated, industry-specific Company Database. .