Demand for variable recurring payments (VRPs) is on the rise, as the cost of living crisis begins to hit the consumer credit sector.
According to new research from GoCardless, 53 per cent of investors said that they would use new technology that automatically moves their money from one account to another with a higher interest rate. 50 per cent of borrowers said that they would use the same technology to help manage their debts.
GoCardless found that 57 per cent of people in the UK are struggling to save due to the rising cost of living. The payments provider said that this is fuelling increased queries about VRPs, as UK consumers seek better ways to manage their money.
“With the cost of living crisis continuing to put the squeeze on personal finances, VRPs couldn’t come soon enough,” said Duncan Barrigan, chief product officer and chief growth officer at GoCardless.
“The research shows clear demand for easy-to-use technology that automatically helps people clear their debts and build their savings. This will be a lot easier after VRPs are introduced. We hope everyone in the financial ecosystem recognises the consumer need for this new technology, and continues to work towards a fast rollout of VRPs.”
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The Competition and Markets Authority has dictated that the UK’s nine largest banks must support the automatic transfer of money between two accounts belonging to the same person. This is commonly known as ‘sweeping’.
NatWest has also announced plans to roll out VRPs for non-sweeping use cases, and has signed agreements with three payment providers in anticipation of this.
GoCardless has been active in the VRP space since 2019, when it took the first live transaction through a sandbox developed by the Open Banking Implementation Entity.
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