76% of payments providers are frustrated with the lack of VRP progress
Nuapay research suggests that more work is needed for variable recurring payments to live up to their potential
There is significant interest among UK payments providers to harness the potential of open banking, according to a survey of payment service providers (PSPs) by open banking provider Nuapay.
Three-quarters of PSPs reported that they’re planning to integrate variable recurring payments (VRPs) and collectively expect over half (51 per cent) of their payment flow will convert to open banking in the next three years.
“The growth anticipated from PSPs highlights the amazing momentum behind open banking,” Annemarie Graham director of strategic partnerships at Nuapay said.
“Expecting over half of payment flows to come from open banking in three years is huge. The PSPs that don’t ride this wave will certainly get left behind.”
That optimism is balanced against a major concern among PSPs over a lack of an industry-wide framework for VRPs, with 76 per cent of providers expressing frustration, especially given the implementation of PSD2 and the launch of open banking over five years ago.
There is also a lack of education on the benefits of VRPs, with 63 per cent of payments providers believing that their business customers need more awareness of the advantages.
“VRPs have the potential to fuel this next stage of adoption,” Brian Hanrahan, CEO of Nuapay said.
“However, the industry needs a standardised framework for this to happen. In the meantime, we have created an alternative solution, Authenticated Mandates, that PSPs/ISVs can use now, that interweaves open banking with Direct Debits.”
Nuapay’s research included a survey of 126 PSPs with 50 or more employees.