Douglas Blakey
6 min read
Adflex has been at the forefront of the B2B fintech revolution since its launch in 2001. It is known for its commitment to innovation and helping companies unlock the potential of digital payments. It covers a range of technologies including travel data, B2B procurement, B2C payments, supplier on-boarding, BACS, SEPA, ACH and hybrid card/BACS payment systems.
Pat Bermingham has been CEO at Adflex since the firm launched and is ideally placed to discuss the potential for B2B payments to catch up with their B2C counterparts. He argus that corporate buyers will soon expect the same simplicity as they get when buying items in their personal lives.
Take more nuanced services like Variable Recurring Payments (VRP). VRPs are simply an evolution of the current direct debit scheme. They allow a business to make a series of payments ahead of time to better forecast spend and facilitate more informed decisions.
One of the most common uses for VRPs in the UK is ‘sweeping’. It was back in Autumn last year that the Competition and Markets Authority (CMA) announced that all nine major banks under its remit had now implemented key open banking services, which included Variable Recurring Payments (VRPs) for ‘sweeping’. Sweeping lets banking customers set up automated transfers between their bank accounts, based on pre-defined instructions. This might be transferring money from a current account to a savings account to access better interest rates or moving money to avoid going into an unarranged overdraft.
Implementing sweeping was for sure an important milestone in the roll out of VRPs, but its impact hasn’t been transformative. For VRPs to reach the levels of adoption that many analyst houses are predicting, more use cases need to be rolled out beyond just sweeping, and without stating the obvious, the roll outs need to go well. The good news is that this year, the Financial Conduct Authority (FCA) is overseeing new implementations of Commercial VRPs (cVRPs).
A ‘standard’ VRP allows users to move money between their own accounts. A cVRP uses the same functionality as a VRP, but for consumer to businesses (C2B), or business to business (B2B) payments.
You might be thinking, ‘but isn’t that very similar to Direct Debit?’. In some ways, yes: both allow users to set up automated, regular payments. However, cVRPs also enable automatic adjustments to a payment, without needing to take any manual action, so long as they’re within the initial terms agreed.
