Explore the pivotal role of Variable Recurring Payments (VRPs), a breakthrough for Payment Facilitators (PayFacs) worldwide, as revealed in our insightful interview with Volt’s CGO, Jordan Lawrence. VRPs (a term specific to the UK) revolutionize digital payments by allowing automated bank-to-bank transfers that users can customize in terms of frequency and amount. This innovation addresses critical challenges in the payments industry by offering a dynamic, real-time solution, signaling a transformative shift towards more efficient and flexible digital payment systems.

Globally, various regions are exploring automated payment solutions that echo the VRP’s functionality, each adapting to their financial ecosystems.

• In Brazil, “Pix Automático” builds on the Pix system to allow automated recurring payments, enabling flexible, real-time transactions. 
• The United States has long utilized “Automatic Clearing House (ACH)” for a variety of payments, including recurring ones, offering reliability and extensive reach. 
• Australia has introduced “PayTo” with plans to expand into recurring payments, offering businesses and consumers a seamless ‘one-click’ payment experience.
• In Europe, the SPAA scheme is developing “Dynamic Recurring Payments,” aiming to facilitate smoother exchanges of payment account data between banks and Third-Party Providers (TPPs), though full implementation is pending. 
• India‘s “UPI AutoPay” feature under the Unified Payments Interface allows for a versatile range of payments, from utility bills to subscriptions, all with instant processing.

These developments signal a move away from reliance on traditional card networks, underscoring the global momentum towards direct, real-time transactions that promise to redefine payment infrastructures worldwide.

The Strategic Importance of VRPs for PayFacs

For PayFacs, adopting VRPs represents a critical opportunity to lead in the payment ecosystem. VRPs enable more direct control over recurring payments, overcoming several key challenges:

• Reduced churn: VRPs facilitate smoother, real-time transactions, significantly lowering the likelihood of failed payments and thereby improving customer retention.
• Enhanced security: By eliminating the need for sensitive card information, the direct bank-to-bank transfers of VRPs substantially decrease fraud risks and chargeback instances, creating a safer transaction framework.
• Regulatory compliance and global adaptation: VRPs are designed to comply with and benefit from the latest instant payment regulations, offering a flexible solution that meets global standards and keeps PayFacs competitive.
• Market anticipation: Responding to the increasing demand for efficient and adaptable payment options, VRPs empower PayFacs to meet these expectations head-on, setting new trends in payment services.
• Innovation in payment orchestration: VRPs signal a shift in payment facilitation, moving towards the integration of scalable, user-centric payment solutions that anticipate and adapt to the evolving needs of the global market.

Transitioning into our discussion with Jordan Lawrence, Co-Founder & Chief Growth Officer (CGO) from Volt, we delve deeper into how VRPs are defining the future of payments and the pivotal role PayFacs play in this evolving narrative.

Interview with Jordan Lawrence

Understanding VRPs: a leap forward

Charles Guinet: “Jordan, could you enlighten us on VRPs and their transformative impact?”

Jordan Lawrence: “Absolutely. VRPs represent a monumental shift in financial transactions. They’re not just another payment method; they’re a revolution that allows for dynamic, account-to-account payments based on actual, not estimated, needs. This innovation brings unprecedented flexibility, enhancing security and streamlining the user experience. By directly linking bank accounts for recurring payments, VRPs bypass traditional barriers, offering a smoother, more intuitive process.”

Volt’s blueprint for VRP integration

Charles Guinet: “How is Volt at the forefront of integrating VRPs into the financial ecosystem?”

Jordan Lawrence: “Volt is not just adopting VRPs; we’re actively shaping their trajectory. Our approach involves developing secure, scalable platforms that support VRPs’ dynamic nature. We’re collaborating with banks and regulatory bodies to ensure these systems are robust and ready for widespread adoption. Our goal is to make financial transactions as seamless as breathing, where VRPs play a critical role in reducing friction and enhancing the financial journey for users worldwide.”

General VRP challenges and opportunities

Charles Guinet: “What do you see as the main challenges and opportunities presented by VRPs?”

Jordan Lawrence: “The journey towards VRP adoption is complex, encompassing regulatory alignment and system compatibility challenges. However, the opportunities far outweigh these hurdles. VRPs offer a chance to redefine financial transactions, making them more aligned with users’ real-time needs. They hold the potential to significantly reduce operational costs for businesses and provide consumers with a level of control and transparency previously unseen in the financial sector.”

VRPs across borders: the european perspective

Charles Guinet: “Could you share your insights on the slower-than-expected launch of VRP solutions in European markets (known as DRPs – Dynamic Recurring Payments)?”

Jordan Lawrence: “The European market presents unique challenges for VRP implementation, including diverse regulatory environments and the need for extensive system upgrades. Our approach involves closely working with regulatory bodies and financial institutions to navigate these complexities. By investing in technology that bridges system gaps and advocating for harmonized regulatory standards, we’re tackling these challenges head-on, ensuring VRPs can reach their full potential across Europe.”

Charles Guinet: “Are there regions within Europe where VRP adoption is notably advancing, and what drives this variance?”

Jordan Lawrence: “Indeed, adoption rates vary significantly across Europe, with regions like the Nordics and the UK leading the way. This discrepancy often boils down to regulatory support, technological infrastructure, and market readiness for new financial technologies. In these leading regions, a combination of progressive regulations, high digital literacy, and strong collaboration among financial players creates an ideal ecosystem for VRP innovation. Volt is actively engaging in these markets, leveraging the momentum to foster broader European adoption.”

Market dynamics and VRP integration

Charles Guinet: “How will VRPs reshape the market?”

Jordan Lawrence:  “VRPs are set to radically alter market dynamics by introducing a new level of adaptability and efficiency. They empower consumers, giving them control over their financial transactions like never before. For businesses, VRPs open up new avenues for innovation in subscription models, utility payments, and beyond. The ripple effect will be felt across all sectors, as VRPs make financial services more accessible, reliable, and user-friendly.”

Real-world applications of VRPs

Charles Guinet: “Could you provide examples of VRPs in action across different sectors?”

Jordan Lawrence: “Certainly, VRPs have a broad application spectrum. For instance, in the subscription economy, VRPs enable services to adjust billing based on actual usage, offering a fairer, more transparent model. In utilities, they allow for precise billing based on consumption. The healthcare sector stands to benefit from VRPs by offering flexible payment plans for treatments, while in education, they could adjust fees based on course access and progression. Retail loyalty programs can also leverage VRPs to tailor benefits more closely to consumer behavior. Each of these examples showcases VRPs’ potential to streamline and personalize financial transactions.”

Conclusion

Jordan Lawrence’s insights from Volt highlight the game-changing nature of Variable Recurring Payments (VRP) in reshaping the digital payment ecosystem. For Payment Facilitators (PayFacs), tapping into the potential of VRPs through NORBr’s platform means unlocking a future where payment processes are not just more efficient and secure, but also aligned with the demand for instant, recurring transactions on a global scale.

By partnering with industry leaders like Volt, NORBr’s platform-as-a-service provides PayFacs with direct access to recurring payment technology. This collaboration is central to our mission of equipping PayFacs with advanced payment solutions that cater to the dynamic needs of today’s businesses and consumers. It ensures that PayFacs, through NORBr, stay at the forefront of payment innovation, ready to navigate and excel in the rapidly evolving financial sector.