U.K. Small Business Credit Card Platform Adopts GoCardless for VRP Deployment

U.K. Small Business Credit Card Platform Adopts GoCardless for VRP Deployment

Automated Payments Boost Small Business Efficiency with Capital on Tap and GoCardless

Variable Recurring Payments (VRPs) are proving to be a game-changer for small businesses using platforms like Capital on Tap and GoCardless. These payments offer several key benefits, including improved cash flow management, reduced late payments, automation, increased payment flexibility, and enhanced customer relationships.

One of the primary advantages of VRPs is cash flow improvements. By enabling businesses to receive payments on a prearranged or variable schedule, VRPs help stabilize and predict revenue streams more accurately. This is particularly beneficial for small businesses as it allows them to forecast their cash flow more effectively. Unlike fixed recurring payments, VRPs allow amounts to vary, matching actual usage or billing, which improves cash flow forecasting and stability.

Another significant benefit is the reduction of late payments. VRPs automate the payment collection process, minimizing late or missed payments that can disrupt small business cash flow. This reduction in administrative burden not only saves time but also helps maintain a steady cash flow, essential for the smooth operation of small businesses.

VRPs also offer automation and time savings. By automating billing and collections, VRPs save small businesses time typically spent reconciling invoices, sending reminders, or manually processing payments. This automation supports operational efficiency and reduces administrative costs.

Flexibility for customers is another key advantage. VRPs allow customers to set pre-approval limits or adjust payment amounts automatically, giving them control and ease in managing variable payment obligations. This flexibility can improve customer satisfaction and retention by making payments hassle-free and adaptable to changing circumstances.

By offering VRPs, businesses can foster customer loyalty through convenient payments without interruptions, encouraging ongoing access to their products or services. This is especially valuable for subscription or usage-based models. VRPs also often qualify for reduced payment processing fees, making them a cost-effective solution compared to one-off payments or manual systems.

Capital on Tap has chosen GoCardless as its Open Banking payment provider. Over £2.5 billion in direct debits have been collected by Capital on Tap and GoCardless, saving in excess of £15 million in card fees. GoCardless's Open Banking feature will be used to collect one-off and recurring payments for Capital on Tap's small business customers.

GoCardless will provide VRPs through its Open Banking feature, called 'Instant Bank Pay'. Customers of Capital on Tap will be able to repay their credit cards on a monthly basis using direct debit. They will also have the option to make weekly repayments and recurring payments for variable amounts through Open Banking. Capital on Tap's small business customers will have greater payment flexibility with the new Open Banking feature.

Pat Phelan, the managing director UK&I and chief customer officer at GoCardless, stated that VRPs are designed to help people and businesses move, manage, and make more of their money. Damian Brychcy, the chief executive officer of Capital on Tap, expressed his support for the decision to use GoCardless for Open Banking payments. Phelan believes that VRPs will bring significant benefits to Capital on Tap's customers, enhancing payment timings, providing flexibility, and improving the overall user experience.

Capital on Tap and GoCardless began working together in 2014. GoCardless is proud to support Capital on Tap as it rolls out its innovative Open Banking technology. With the introduction of VRPs, small businesses using Capital on Tap can look forward to improved cash flow management, reduced administrative workload, and a better customer experience through flexible, timely payments. This combination supports small business growth and operational efficiency in managing variable recurring revenue streams.

1. The automation provided by Variable Recurring Payments (VRPs) is beneficial for small businesses, as it helps reduce administrative burden and save time, thus increasing operational efficiency.
2. VRPs can foster customer loyalty by offering convenient, flexible payments, which can encourage ongoing access to a business's products or services, especially for subscription or usage-based models.
3. GoCardless's Open Banking feature, 'Instant Bank Pay', will offer VRPs for Capital on Tap's small business customers, enabling them to make recurring monthly, weekly, or variable amount payments through direct debit.
4. The use of VRPs can bring significant benefits to businesses and their customers in the finance industry, including improved cash flow management, reduced late payments, automation, increased flexibility, and a better overall user experience.

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