What are variable recurring payments? The open banking alternative to Direct Debit
By SendPay Business · · 2 min read
Variable recurring payments, or VRPs, let a customer give a business permission, through open banking, to take payments of varying amounts from their bank account within limits the customer sets. Each payment is sent instantly by bank transfer.
How a VRP works
- The customer approves a mandate in their banking app.
- They set limits, such as a maximum per payment and per month.
- The business starts payments within those limits when needed.
- Each payment arrives straight away, and the customer can cancel the mandate in their app.
VRP vs Direct Debit and standing orders
A standing order is a fixed amount the payer sets up. A Direct Debit lets a business collect varying amounts, but payments take days to clear. A VRP combines varying amounts with instant payment and customer-set limits.
Where VRPs are used
In the UK, the largest banks were required to support 'sweeping' VRPs, which move money between a customer's own accounts, for example to top up savings. Using VRPs to pay other businesses, often called commercial VRP, has been rolling out more gradually.
Where SendPay fits
SendPay platforms include accounts, transfers, subscriptions and payment links under your own brand, powered by licensed partners. SendPay tells you in writing which licences apply to your platform before you pay.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.