What are sweeping payments? How do they work? How do they relate to variable recurring payments? Get up to speed in (almost) 2 minutes, with our latest handy explainer video.

Hey. I'm Andy from TrueLayer, back for another quick explainer. And today we're going to talk about variable recurring payments or specifically sweeping and why it's all really important for businesses that collect recurring payments. Now there is a lot to unpack here, but if you give me just a little bit of your time, I think I can share all the really important stuff. Fire up the stopwatch.

Okay. So to explain sweeping, I do quickly need to explain variable recurring payments, AKA VRP.

So VRP is a new payment method in the UK that's been made possible by Open Banking, and it offers consumers the ability to set up repeat payments of fixed or varying amounts, all directly from their bank accounts.

It's like the recurring version of Pay by Bank, which is why at TrueLayer we call it bank on file. And also the payment industry already has way too many acronyms.

And sweeping is simply a specific type of bank on file payment. It's a recurring payment between two accounts that belong to the same person.

And sweeping has a few clever use cases that merchants can already offer their consumers including moving money to maximize returns and intelligence savings, paying off credit cards and other unsecured loans with automated repayments, and smart overdrafts that stop customers going overdrawn to name just a few of them. And to set up a regular payment via sweeping your customer will go through a process that looks a bit like this.

• So number one, they select the bank on file option at the checkout or payment page.

• Number two, they choose the bank.

• Number three, they review and accept the details on mandate.

• And then they get redirected to their bank app to securely authenticate it all

It's a simple and seamless experience that can take as little as thirty seconds. Now I know what you're thinking. Don't recurring payment methods like direct debit, standing orders, and card on file make VIP a little bit redundant?

Well, while each of those methods do have their own benefits, they also have their own drawbacks backs as well. And none of them offer a truly modern recurring payment experience that's good for both the merchant and the consumer until now anyway.

For a start, Sweeping has instant settlement, a better user experience from start to finish, reduced fraud, thanks to baked in SCA, and typically, it has lower total cost of ownership. And another key feature is something called instant confirmation of funds. This means merchants can check whether a customer has sufficient funds in their account before they execute the payment. Then if it comes back that your customer doesn't have sufficient funds, you can either adjust the amount accordingly or you can let them know that they should top their account.

And that reduces the likelihood of a failed payment. All in all, this results in a recurring payment method that's better for merchants and consumers alike. Right. We've got through quite a lot there, but bank on file, thanks to sweeping, is already a powerful recurring payment method used by smart saving apps, lenders, and other credit providers. But there is more on the way with the next phase of bank on file.

Things like utility bills, government payments, and financial services payments are next in line, likely coming late twenty twenty five, and with subscription payments and one click ecommerce appearing sometime in twenty twenty six.

To find out more about VRP and sweeping and how TrueLayer can help you offer it to your customers, just click the link that's on screen now. And thanks for watching. I'll see you next time.