The Competition and Markets Authority (CMA) has agreed to delay the introduction of Variable Recurring Payments (VRPs) for ‘sweeping’ services, after the Open Banking Implementation Entity (OBIE) warned that the UK’s largest banks would be unable to meet the deadline.
VRPs allow customers to connect authorised payments providers to their bank account so that they can make payments on the customer’s behalf, while ‘sweeping’ is the automatic transfer of money between a customer’s own accounts.
OBIE chair Charlotte Crosswell (pictured) wrote to the CMA to say there is not a realistic prospect of meeting the target of implementing VRPs for sweeping by 31 January 2022.
Instead, she recommended sharing a detailed delivery plan for full capability by that time, being ready to start TPP testing and validation in the first quarter next year and to have successfully completed testing of the VRP standard in a live, controlled environment by third party providers s by July 2022.
Daniel Gordon, senior director, markets at the CMA, welcomed the recommendation, in a letter of reply to Crosswell.
“The CMA has considered the recommendation and agrees that, under the circumstances, revising the implementation timetable for the VRP standard for sweeping services in the way you recommend is the most appropriate way to proceed,” Gordon said in the letter.
“In particular, we agree that in order for the standard to be considered implemented, it needs to be available for general use by TPPs.
“While it is clearly disappointing that the January 2022 timeframe will not be met, it remains vitally important to ensure that work to progress the standard’s implementation continues as a priority, and at pace, across the CMA9.”
The OBIE said the CMA’s announcement provides “additional clarity” regarding the implementation timetable.
“VRPs are a new way to make ongoing payments,” the OBIE said.
“You can think of them like ‘smart direct debits’, which are set up with a provider, but allow the customer to choose when they end and the payment limits (for example no more than £15 per month).
“Customers will be able to see what permissions they have granted in their banking app. This is all about putting customers, not companies, in control of their money.
“The intention of this revised timetable is to ensure that open banking payment providers can start to pilot new propositions early in 2022, whilst ensuring that all CMA9 banks have an appropriate amount of time to successfully implement VRPs for sweeping by mid-2022.”