By Aisling Finn on Tuesday 16 November 2021
Firms will now have to demonstrate they have successfully tested VRPs by the end of July 2022, not January.
As debate on the future of open banking rages here in the UK, the Competition and Markets Authority (CMA) has moved the goalposts once more following push back from the Open Banking Implementation Entity (OBIE).
The CMA is delaying the introduction of variable recurring payments (VRPs) by another six months after new OBIE trustee Charlotte Crosswell warned that “most if not all the CMA9” would not meet the 31 January 2022 deadline.
VRPs are the latest technology in open banking, said to rival Direct Debits, and are just in their infant stages, with customers able to choose when they end and set their own payment limits.
Accepting the OBIE’s recommendations, firms will instead be required to share a detailed VRP delivery plan by January 2022 and be ready to start third-party testing in the first quarter of next year.
Firms will have had to have completed the testing phase by the end of July 2022, six months after the initial deadline.
In a statement, the OBIE said: “The OBIE welcomes the announcement from the CMA that provides additional clarity regarding the implementation timetable for Variable Recurring Payments (VRPs) for Sweeping.”
“The intention of this revised timetable is to ensure that open banking payment providers can start to pilot new propositions early in 2022, whilst ensuring that all CMA9 banks have an appropriate amount of time to successfully implement VRPs for sweeping by mid-2022.”
While it is disappointing that the deadline has been pushed back, the move towards VRPs is still a positive step in the right direction for open banking.
With better transparency, and giving the consumer more control over their finances, open banking could begin making real headway into the mainstream.