UK Small and Medium Enterprise (SME) credit card platform chooses GoCardless for the implementation of Virtual Recurring Payments (VRP)

UK Small and Medium Enterprise (SME) credit card platform chooses GoCardless for the implementation of Virtual Recurring Payments (VRP)

Capital on Tap, a leading UK-based small business credit card and spend management platform, has announced its partnership with GoCardless to roll out Variable Recurring Payments (VRPs) through the Open Banking feature, 'Instant Bank Pay'. This innovative technology promises significant benefits for small businesses, including greater convenience, lower costs, improved payment success rates, and an enhanced customer experience.

The Advantages of Variable Recurring Payments

The key benefits of VRPs for small businesses like Capital on Tap are numerous. One of the most significant advantages is the increased convenience they offer. VRPs enable a one-click checkout, saved payment authorizations, and mobile-friendly user experiences, eliminating the need for merchants and customers to re-enter payment details.

Another key advantage is the higher payment success and cash flow predictability. With VRPs, merchants can verify customer balances before attempting payment, send low-fund warnings, and implement retry mechanisms automatically. This reduces failed payments and helps small businesses maintain steady, predictable cash flow, which is crucial for firms offering ongoing credit or subscription services.

VRPs also come with lower transaction costs compared to card payments or direct debits, offering significant cost savings for small businesses with many recurring payments. Moreover, VRPs allow for varied payment amounts and frequencies, ideal for usage-based billing, supporting innovative billing models and enhancing customer consent and control.

In addition, VRPs provide safer payment mechanisms, reducing fraud risks compared to Direct Debits, thereby lowering risk exposure for small financial service businesses.

The FCA's Role and Future Entity

UK regulatory developments led by the Financial Conduct Authority (FCA) and the establishment of a new standard-setting body, "Future Entity", to oversee VRP implementation further bolster VRPs as a trustworthy, scalable payment method. These developments will unlock broader open banking use cases beyond the household, benefiting SMEs.

The Success of the Capital on Tap and GoCardless Partnership

The partnership between Capital on Tap and GoCardless, which began in 2014 with direct debit services, has already saved in excess of £15 million in card fees. Over the course of their partnership, they have collected more than £2.5 billion in direct debits.

Damian Brychcy, CEO of Capital on Tap, believes that the decision to choose GoCardless for Open Banking payments makes sense due to the strong relationship and convenience of using one trusted provider. With GoCardless, Capital on Tap's small business customers will have greater payment flexibility, including the ability to repay credit cards monthly, weekly, and for variable amounts.

Pat Phelan, Managing Director UK&I and Chief Customer Officer at GoCardless, shares this sentiment, stating that VRPs are designed to help people and businesses move, manage, and make more of their money. He believes that the partnership between Capital on Tap and GoCardless will continue to provide benefits, as they will now collect both recurring and ad hoc payments through one trusted provider.

The use of VRPs will provide Capital on Tap's customers with greater payment flexibility, enhancing their payment timings, providing flexibility, and improving the overall user experience.

In summary, the partnership between Capital on Tap and GoCardless is set to bring significant benefits to small businesses, offering cost-effective, secure, and customer-friendly recurring payments with enhanced cash flow management and operational efficiencies through open banking infrastructure.

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6. The partnership between Capital on Tap and GoCardless utilizes technology such as Variable Recurring Payments (VRPs) and Open Banking to offer significant benefits for small businesses, including increased convenience, higher payment success rates, lower costs, and better cash flow management.
7. VRPs, through the Open Banking feature 'Instant Bank Pay', enables one-click checkout, saved payment authorizations, and mobile-friendly user experiences, eliminating the need for merchants and customers to re-enter payment details.
8. The Future Entity, a new standard-setting body established by the UK regulatory developments led by the Financial Conduct Authority (FCA), is expected to further bolster VRPs as a trustworthy, scalable payment method, benefiting SMEs beyond household use cases.
9. Capital on Tap's customers will experience enhanced payment flexibility with VRPs, allowing for monthly, weekly, and varying amounts for repaying credit cards. This partnership between Capital on Tap and GoCardless will continue to provide benefits by collecting both recurring and ad hoc payments through one trusted provider.

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