Amid the daily, relentless cascade of gloomy news this quarter, from rising inflation, soaring energy and petrol prices, the risk of recession, incompetent airlines cancelling flights and the threat of rail strikes, comes something positive from GoCardless.
As the rising cost of living crisis ramps up pressure on consumers, GoCardless highlights the potential offered by Variable Recurring Payments (VRPs) as UK consumers clamour for better ways to manage their money.
GoCardless research suggests that around one-half of consumers would use new technology that automatically moves their money from one account to another with a higher interest rate (53%) and to pay their debts (50%). Over a quarter (28%) indicate they are “too busy” and often lack the time to think about budgeting or managing their money. That kind of finding is no surprise and consistent with stats such as a mere 2% of consumers being bothered to switch their primary current account. And that miserable figure remains unchanged year after year, despite switching incentives and the excellence of the Pay UK 7 day switching service.
The findings from GoCardless come just weeks before the CMA’s ‘sweeping’ deadline for VRPs, with banks like NatWest already gearing up for the industry-wide rollout. One puzzle remains: there has never been a wider range of accessible budgeting tools. And yet some 30% of Gen Z and millennials say they find it difficult to budget and manage their money every month.
As GlobalData research has noted, this segment of the market has been suffering the most from the Bank of England’s interest rate policy, so any initiative such as VRP is to be welcomed.
GoCardless has been active in the VRP space since 2019 and just last month launched Nude, the savings app for first-time buyers, as its first VRP customer. It has also been chosen as a payment provider for VRPs by NatWest Group and recently launched one of the country’s first ‘non-sweeping’ VRP pilots with NatWest and Charity Right. This is one to watch with interest and one has to wish it well.