Variable Recurring Payments

VRP (3)

Shiona Crichton - Moneyline CEO

12th February 2024

VRP for Good!

At Moneyline, we believe that if we can offer customers a payment method that works for them, we can help reduce the growing financial exclusion problem. 

The Issue

Many people are excluded from products and services because they struggle to make the full payment on the same day each month. If they do use products with a monthly payment and struggle to pay, this can lead to a worsening credit score, which in turn excludes them from more products. Until now the cost of taking frequent payments from a customer has had cost barriers for organisations – both transactional and resource. 

According to ONS data, in October 2023 failed Direct Debit bill payments hit the second-highest rate on record at 0.89% (only January 2023 has been higher). 2023 had higher failed Direct Debit payments than in 2022, with electricity and gas failed payments remaining much higher than normal. Part of this is due to the cost-of-living crisis where we are seeing more customers switch to weekly budgeting to manage their bills, however, for many low-income households making large monthly payments has always been a struggle.  

There is also the added issue of the time lag it takes to set up or change a Direct Debit for a customer. Our customers often don’t know they can’t pay a bill until a few days before a payment is due and this is too late to amend a Direct Debit. This can mean they get charges from their bank, or service providers and can get behind on their payments. In the Fair by Design Report (May 2023): Payment systems and the poverty premium, 2 of the calls to action were regarding flexibility of payment method; it’s not just Moneyline that thinks this is an issue for customers. 

And finally, on average 6% of people in the UK still use cash or cash like products to pay for things, and more people are turning back to cash after a reduction in usage in the Covid years. While this helps them to budget effectively it means they don’t have a digital footprint showing their bills. More and more products are using automation for decision making and this often includes the use of open banking data (online banking information), which relies on seeing those bills using automation. Without a financial digital footprint, it is very hard to offer an automated decision service to cash customers and we can see this becoming a bigger problem going forward. 

Offering a solution

We want to see, that if by offering a payment solution that works for the customer, more will be inclined to make payments digitally and will then have more access to products and services – win win for customers and organisations!  

Variable Recurring Payments (VRP) overcomes many of the traditional barriers that organisations have in offering more flexible and frequent payments. But… it’s new, it’s untested and it’s high risk to trial as could lead to customers not paying when the payment is due! We are in a position to do this trial thanks to the support of the project from the Aviva Foundation. 

With VRP there is no time lag to setting up a mandate – it’s done immediately in the customer’s banking App!

Even better, a customer can change the amount they pay right up to the day when the payment is due. It’s also really easy for a customer to change payments or make extra payments. 

Alongside the VRP offering, we will be testing out a cost calculator to see if by showing customers the money they could save by making early payments, they can reduce their overall cost of credit. It means they can also see the impact of not making a payment, allowing them to make an informed decision by providing transparency. 

Moneyline is in a unique position to trial VRP and the cost calculator: 

  • Our core customer group is often financially excluded, and they pay premiums for products. 
  • We have been using open banking payments for a couple of years and have a flexible infrastructure that means we can make changes to our customer journey and communications quickly. 
  • We have a strong relationship with many of our customers and collect relevant data in our process which means we can get valuable insights quickly through data and direct from the customer.
Being Part of the Solution

Our trial starts now and runs over a 3 year period. It will test and learn to see 

  1. Which customer groups will benefit most from VRP. 
  2. What communications work best for customers to ensure they engage and understand the concept. 
  3. If we can reduce the overall cost of a product for a customer by being transparent about the impact of each payment. 


We are not doing this just to help Moneyline customers, but to share our learnings in the hope that organisations will be able to offer more excluded customers their products and services just by changing the way to pay. 

Want to find out how to support our trial more? Contact me on  

VRP (1)

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