VRP APIs unveiled
Issue 314 | 3 May 2022
Welcome to the many new Payments:Unpacked subscribers who have joined us over the last week! If you haven’t subscribed, join the thousands of smart payments people who read Payments:Unpacked by subscribing here:
Payments:Unpacked is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
Here’s a testimonial I received recently from an avid Payments:Unpacked reader:
Thank you Mike for being part of your network. You are one of the most knowledgeable seasoned UK blogger/vlogger. Pleasure to have met you. Thanks for the upgrade to CoP network and Payments Unpacked.
TrueLayer unveils VRP API
TrueLayer has unveiled a recurring payments API capable of dealing with both sweeping and non-sweeping use cases. The Competition and Markets Authority (CMA) has mandated the UK’s nine largest banks to provide Variable Recurring Payments (VRPs) that support the automatic transfer of money between two accounts belonging to the same person.
VRPs allow customers to connect authorised payments providers to their bank account so that they can make payments on the customer’s behalf within agreed parameters.
However, amid some confusion over what use cases fall within the scope of the Sweeping definition, the CMA has stressed that the practice cannot be mandated for making e-commerce purchases.
Matt Parish, product lead for VRP at TrueLayer, comments: “The mandated approach, while beneficial, only supports payments between an individual customer’s accounts, limiting the ultimate potential of VRP. We are proud to announce the industry's first recurring payments API that goes beyond that mandate to deliver comprehensive payment options that will create a better customer experience.”
TrueLayer says it is collaborating with select banks around non-sweeping, offering businesses recurring payments to their customers for a range of services, including utility bills, subscriptions and other forms of digital payments. Using VRP through TrueLayer enables the amount being collected to vary without needing the account holder to re-consent every payment - for example, utility bills with a fixed payment date but different amounts due each time.
The firm has already signed up NatWest, which is to begin pilot testing of variable recurring payments with its open banking payments product Payit in the first half of 2022, with plans to scale to a commercial product ready by early 2023
"We have a number of clients that have seen the potential for VRP to deliver significant benefits to their business and their customers, working with us to implement sweeping and non-sweeping recurring payments in the coming months," says Parish. "We believe that, to truly deliver on the promise of Open Banking, boost fintech innovation in the UK and provide businesses and consumers with payment options that work for them, every CMA9 and non-CMA9 bank should make VRP APIs for sweeping and non-sweeping available as soon as possible.”
Authorised Push Payment reimbursement code extended and Confirmation of Payee mandated
The UK's Lending Standards Board (LSB) has published updates to the Contingent Reimbursement Model (CRM) Code – the set of voluntary standards which aim to protect people against authorised push payment (APP) fraud.
Launched in 2019 and overseen by the LSB, the CRM Code requires signatory firms to detect, prevent, and respond to APP scams. Signatory firms - who comprise the UK nine biggest financial institutions - also make a commitment to reimburse customers who lose money in cases where they were not to blame for the success of a scam.
The Board says the three most significant updates to the Code will help improve customers’ understanding of how firms are assessing APP scam cases, help prevent scams, and make the Code accessible and relevant to a wider range of firms.
The first update requires banks to ensure that customers are given a clear explanation to help them understand reimbursement decisions made by firms. Secondoly, all signatory firms will be required to activate Confirmation of Payee checks for outbound payments.
The third measure adjusts provisions within the Code to allow more firms to sign up, extending the model to a wider range of institutions and consumers.
Emma Lovell, chief executive of the LSB, says:
Today’s updates will up firms’ scam prevention efforts, ensure a wider spread of customers are protected from scams, and will help build transparency and understanding between firms and their customers.
The rise and success of scams is not an issue financial services firms can solve on their own. By point-of-payment it is often too late - with victims socially engineered to proceed with the scam no matter what. We are therefore also calling on social media platforms, telecommunications companies, and utilities to step up and increase their efforts to intervene at every opportunity.
Building Societies Annual Conference
With the Lending Standards Board’s announcement on mandating Confirmation of Payee (CoP) firmly in my mind I am looking forward to attending the Building Societies Annual Conference in Liverpool later this week Thursday, 5 May 2022).
If you are at the event make sure you drop by the SurePay booth (Booth 36) and see how SurePay can support you and your customers reduce fraud with their best in class Confirmation of Payee solution.
Five facts about SurePay:
SurePay have processed over 4.5 billion CoP checks.
SurePay have helped customers reduce bank fraud by 81%.
SurePay have supported customers such as NatWest and HMRC with their CoP solution.
SurePay are CoP phase two ready, including SRD.
SurePay have unrivalled experience in delivering CoP from design and delivery, to thought leadership.
More: At the conference SurePay will explain about how their Confirmation of Payee solution can move your society members towards a safer, more seamless user-experience.
Payments 2025 ad Beyond
Accelerated by the COVID-19 pandemic, payments are becoming increasingly cashless and automated. As digitalisation continues to advance, it's interesting to speculate at what the payments landscape will look like in 2025 and beyond.
Financial coalition to trial faster cross-border payments between Europe and the US
EBA Clearing, Swift and The Clearing House (TCH) are to run a pilot service for immediate cross-border payments (IXB) with the support of banks from both sides of the Atlantic.
The pilot, designed with the contribution of 24 financial institutions, is scheduled to begin by the end of this year. The service promises to improve cross-border payments by utilising the fastest domestic payment options.
The IXB project follows proof-of-concept trials conducted in October with the support of seven financial institutions. The PoC demonstrated the ability to synchronise settlement in one instant payment system with settlement in the other and to convert real-time messages between both systems.
Based on the ISO 20022 message standards, Swift Go and the instant payment systems of EBA Clearing and TCH, the service initially will support instant payments in the US dollar and euro currency corridor.
It is envisaged that the IXB pilot will be followed by a full service offering in 2023.
Last week the volume of ATM Transactions decreased by 29% when compared to the final week before the first COVID lockdown.
In the latest edition of SWIFTs “ISO20022 in bytes”, SWIFT share the results of two major customer surveys. These give an indication of what the SWIFT community can expect in terms of traffic volume and message flows at go-live in November 2022. The blog also provides an update on all the latest programme milestones and a reminder of all you need to do to ensure readiness for November.
Five survey findings from SWIFT:
SWIFT anticipate that a maximum of 45% of payment traffic will be initiated in the ISO 20022 format from November 2022.
95% of intermediary flows received in ISO 20022 will be relayed in ISO 20022.
About 27% of traffic initiated in ISO 20022 will contain rich party information (ultimate debtor/ultimate creditor).
Approximately 19% of traffic initiated in ISO 20022 will contain other rich data elements i.e. category purpose, regulatory reporting and LEI.
About 24% of traffic initiated in ISO 20022 will contain a structured postal address and only 5% will contain structured remittance information.
More: ISO 20022 bytes.
Are you addicted to cheques?
Back in the late 1980’s Barclays disrupted retail payments in the UK with the launch of the Barclays Connect card.
Now referred to as a Debit Card it is easy to forget what a transformation the Connect card made in the way we pay for things.
Here’s a great vintage ad from Barclays encouraging 20th Century consumers to break their addiction to writing a cheque at the till in Tesco’s to pay for the weekly groceries.
My (small) claim to fame in this payments niche is that I was responsible for the launch of the Barclays Business Debit Card (the successor to the Connect card) - the first business debit card launched in the UK!
Don’t Forget: Is Britain ready to go cashless?
However, this digital transformation has also driven major changes to our cash infrastructure. Bank branches have closed at an electric pace, free-to-use ATMs have declined, accessing and depositing cash have become more challenging for both individuals and small businesses.
In the decade from 2008-2018, the proportion of cash payments halved. Even prior to the Covid-19 pandemic, it was clear cash was no longer king. The pandemic has now turbocharged the ‘dash from cash’ with cash withdrawals down by around 40% since March 2020. On the surface, it may seem like the end of the road for cash.
But is that the case? Are some people more prepared for a digital economy than others? How will the cost of living crisis impact cash use? Do different regions face different challenges when it comes to cash?
The RSA’s recent study, The cash census, has surveyed over 3,000 people and ran a series of focus groups and interviews to better understand differing attitudes to cash.
Join the RSA for their online webinar, where they will present the findings from this research. Attendees will also hear directly from people on their attitudes to cash and digital payments, along with an expert panel debate, interactive poll, and Q&A.
Funded by LINK Scheme Ltd the RSA’s study is the most comprehensive report on cash since Natalie Ceeney CBE’s 2019 Access to Cash Report. The event will be chaired by Dr Al Mathers – Director of Research at the RSA.
Speakers will include:
Natalie Ceeney CBE, Chair of the Cash Action Group (CAG) and leader of the Access to Cash Review in 2019
Mark Hall, Lead author of The cash census report, RSA
Nick Quin, Head of Financial Inclusion at LINK – the UK’s largest ATM network.
Register for the webinar to be held on the 12 May: Is Britain ready to go cashless?
Webinar: The next era of UK payments innovation
Hear from ACI Worldwide, Pay.UK, Santander and NatWest on how they are future-proofing payments for a new era of both innovation and infrastructure.
The panel will discuss what’s next for payments innovation; how technology, competition and Open Baking will transform the UK payments landscape; and how players can prepare for NPA, ISO20022 and more.
Covering Request to Pay, Confirmation of Payee, card payments, Direct Debit and A2A payments Payments:Unpacked is pleased to work with the following partners:
Request to Pay: Join the secure payment revolution with Answer Pay.
Confirmation of Payee: SurePay’s Confirmation of Payee (CoP) service is an innovative, real-time name checking solution that gives UK payers greater assurance that their payments are going to the intended recipient.
Card Payments: Card Industry Professionals supporting Businesses to Accept Payments In-Store, Online or Over The Phone!
Payment Solutions: Seamless, secure & affordable payment solutions that enable organisations of all sizes to accelerate growth & innovation from Access PaySuite.
If you’d like to join support Payments:Unpacked in helping unpack the UK’s payments landscape contact: email@example.com
Help grow Payments:Unpacked’s audience
If you enjoy reading Payments:Unpacked please share the word with your friends and colleagues - sharing the newsletter makes such a difference to growing the newsletters audience.