Plend will use VRPs alongside GoCardless Direct Debit to offer customers even more payment choice. The flexible nature of VRPs will enable customers to easily change their payment schedule to suit their financial situation. Because VRPs offer instant payment confirmation and move money more quickly than Direct Debit, they will also give customers an up-to-the-minute view of their finances and lower the incidence of late payments.

On the back-end, VRPs will significantly reduce the number of manual tasks for the operations team as more routine work becomes automated, such as creating new mandates when customers want to change their loan value or repayment period. The automation means that Plend’s customers can make changes to their payments anytime, tapping into features like payment holidays and interest rate freezes without an additional wait.

Jamie Pursaill, co-founder and Chief Technology Officer at Plend, said: “We’re excited to adopt VRPs to make loan repayments truly tailored to each customer, especially as the cost of living crisis continues. In addition to making the process smoother, our team can use VRPs to be more responsive to customers who are missing payments or in financial difficulty, reaching them faster and hopefully coming to a resolution even sooner. Plus, we can pass on the savings from our efficiency gains to our customers in the form of lower APRs.”

Pat Phelan, UK MD and Chief Customer Officer at GoCardless, said: “We’re proud to support Plend as they broaden financial inclusion through smarter credit decisioning. The use of cutting-edge technology to personalise their offering is at the heart of their business model, so it’s no surprise they plan to introduce VRPs to offer greater flexibility for their customers. We can’t wait to see the benefits of VRPs come to life through this use case.”

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. In 2022 it became one of the first VRP providers for NatWest Group and launched a ‘non-sweeping’ VRP pilot with NatWest and Charity Right. GoCardless provides VRPs through its account-to-account payment platform, which covers both Direct Debit and open banking payments, to several companies in the financial services sector including Pillar and Nude.

VRPs are a new form of payment powered by open banking. Similar to Direct Debit payments, VRPs allow an organisation to collect payments from a customer on a recurring basis, without asking for permission each time.

VRPs are a great payment option when you want more speed, transparency and control. They offer instant payment confirmation instead of the two to three-day wait with Direct Debit. In addition, with Direct Debit you can only see the mandate and the last amount taken, and you must cancel or amend your payment in advance. VRPs allow you to manage your mandate and payment parameters within your banking app and they can be cancelled or amended right up to the moment before a payment is taken.