Recently, the Competition and Markets Authority (CMA) announced that the nine largest banks in the country will have to introduce VRPs to enable the “sweep”. VRPs allow customers to securely connect authorized payment service providers to their own bank accounts.
Swiping will help people manage their money better in 2022, according to financial experts at GoCardless.
The process can allow savers to set up settings for their bank accounts to instantly transfer money much faster and cheaper than direct debit and credit cards.
Speaking exclusively to Express.co.uk, Duncan Barrigan, Chief Product Officer at GoCardless, explained how this new ‘competitive’ financial measure will benefit ordinary people and their savings.
“Think of swiping as me-to-me transfers, money moving between accounts owned by the same person,” Barrigan explained.
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According to the payment expert, the sweep is a competitive metric that gives savers the ability to access financial opportunities they may not have been aware of.
Specifically, Barrigan believes this practice will make it easy for people to increase their savings and earn better interest with easy access to financial platforms, such as Nutmeg.
Also, he claims that clearing credit card debts can be accomplished faster with swiping.
This will give savers the opportunity to avoid late payment fees and the accrual of additional interest.
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“If you have money in your checking account and you want that money to work for you, you can earn interest in a savings account.
“Your bank can do it for you. In some cases, you can persuade your bank to offer you a savings account.
“With the VRP scan, it opens up to the best product on the market, with third parties being able to set up these scans so your money can be used for you.”
According to Mr Barrigan, banks stand to lose with the introduction of swiping as their role as third parties in payment transactions will be diminished.
He said: “The person you do your banking with is probably the party that benefits the least because they can already transfer the money between accounts.
“What people should be looking for is competition and getting the best product on the market.
“They should look for new, innovative products, ones that offer the best savings rates.”