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European open banking platform TrueLayer has partnered with The Credit Thing, implementing the platform’s recurring payments API and making the first consumer Variable Recurring Payments (VRP) transactions in the UK.

The Competition and Markets Authority (CMA) has mandated the UK’s nine largest banks to provide VRPs which support the automatic transfer of money between two accounts belonging to the same person, referred to as ‘sweeping’.

TrueLayer claims to be the first open banking provider to offer a single API that enables businesses to connect to select UK banks to take recurring payments as a replacement for direct debit and card-on-file payments.

The Credit Thing aims to help people in the UK who are unable to gain access to credit due to thin credit histories. By using open banking, the firm’s customers can securely link their bank accounts during the application process to prove their creditworthiness.

The Credit Thing will use TrueLayer’s recurring payment API to deliver an improved customer experience for repayments in a process that takes “seconds”.

“Consumers also have far more control, with a single payment approval that removes the need to re-authenticate or re-authorize transactions, through a payment consent that is tied to a bank account and doesn’t expire until it’s revoked by them,” the firm says.

Unlike both direct debit and card-on-file, recurring payments with TrueLayer provide The Credit Thing with instant access to the funds deposited.

The company also claims that it is a “more cost-effective” alternative, removing the fees incurred by card payments and their potential for chargebacks, and the operational overheads of managing direct debits.

“This isn’t innovation for the sake of it. It delivers meaningful benefits – consumers are firmly in control, the service is secure and user friendly, the cost of service is ultra-competitive, and regular payment approval rates are likely to be phenomenal,”
                               Colin Hollingsbee, The Credit Thing chief information officer (CIO).
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