Variable Recurring Payments (VRPs): Reflecting back on taking the first payment

This July will mark my third anniversary as a Product Manager at GoCardless, something which is made even more meaningful by the month being shared with the CMA’s mandated launch of Variable Recurring Payments (VRPs) in the UK. This is because, to me, it represents an interesting full-circle moment. When I became a GeeCee in 2019, my first project was to launch a proof of concept for VRPs and, in the process, I supported GoCardless in taking the world's first-ever Variable Recurring Payment. 

Currently, I am the Product Manager for the payment success team, however, I was originally part of an experimental product development team that was looking to leverage data and data science to solve customer problems. VRPs had already been scoped out as something the organisation wanted to explore as a proof of concept before I joined, so it made sense that it would fall in my remit given the experimental nature of the team. My role at the time was to plan the execution of the project and decide how were we going to run the proof of concept, who needs to be involved, should merchants be involved, and what will the use case be… After much deliberation, it was decided that it would be an internal use case in we would use to collect money our merchants owed to GoCardless. We kept the proof of concept small and invited a handful of merchants to take part in it. The core reason behind this is that VRPs were brand new technology, they didn’t exist and this approach made it both lower risk and gave us access to any learnings faster! 

We collaborated closely with Yapily and Starling Bank in order to launch VRPs and, to help us thoroughly test, a member of the team volunteered to allow us to collect a small payment from their Starling Bank account (and by small, I mean pennies). It was the quickest and safest way to test and it was a significant milestone when it worked. In fact, I framed a penny for her as a memento of the project. We then took proof of concept a step further and began collecting our own GoCardless invoices and fees from our merchants by VRPs. It was a really good way to test brand new technology in a low-risk way, but it was also incredibly interesting because we had created VRPs, it was the real thing working in the real world.

As the project was only ever meant to be temporary, we collected payments through VRPs for around three months. Despite knowing what we were creating was going to be short-lived at that time because the wider technology wasn’t available in the market, the whole team rallied together as we really believed that our project would help to inform the future of VRPs. We all took a lot of pride in building it and it felt like a very big deal to be the first to collect money in a very different way, putting people at the epicenter of controlling payments. 

We used that time to really learn about the user experience, the integration experience, and how VRPs aligned with user consent. I believe it was this extensive knowledge that earned us a seat at the table with the Open Banking Implementation Entity (OBIE), which was huge as it meant that we had a first-hand opportunity to try and influence the decisions they were making around technology. When you’re building technology in hopes that it will be adopted by millions of people and businesses, over-protective legislation mustn’t put people off. One example is the former 90-day payer re-authorisation requirement which during our proof of scope we identified as a blocker that could directly impact customer conversion. We were then able to directly feedback and engage with the FCA and OBIE on our concerns. To collaborate with the OBIE around those types of decisions for open banking was, and is still, incredibly important to us.

I’ve seen GoCardless invest significantly in open banking and I believe that we’ve been able to shift the conversation as we’ve worked with the consumers, the payers, to provide a new level of confidence and control over their payments. I have seen first-hand the potential of VRPs and I’m excited about what the technology will enable when more widely available later this year through Instant Bank Pay for recurring payments. Three years on and I’m just as excited now about the vision of what VRPs and open banking can offer as I was when I first started.

Interested in finding out more about Variable Recurring Payments (VRPs)?

If you're unfamiliar with VRPs or would like to learn more about them, then you can now read our blog 'Understanding VRPs and what they could mean for payments' or watch our helpful on-demand webinar with special guests from Accenture and Plum.

You can also find out more about GoCardless' VRP offering: Instant Bank Pay for recurring payments here.