Recently, the Competition and Markets Authority (CMA) has announced the country’s top nine banks will have to introduce VRPs to enable “sweeping”. VRPs allow customers to safely connect authorised payments service providers to their own bank accounts.
Sweeping will assist people in managing their money better in 2022, according to financial experts from GoCardless.
The process can allow savers to set parameters for their bank accounts to instantly transfer money far more quickly and cheaply than with Direct Debit and credit cards.
Speaking exclusively to Express.co.uk, Duncan Barrigan, the chief product officer at GoCardless, outlined how this new “competitive” financial measure will benefit everyday people and their savings.
“Think of sweeping as me-to-me transfers, money moving between accounts that belong to the same person,” Mr Barrigan explained.
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According to the payment expert, sweeping is a competitive measure which gives savers the opportunity to access financial opportunities they may not have known about.
Specifically, Mr Barrigan believes the practice will allow people to boost their savings easily and acquire better interest by accessing financial platforms, such as Nutmeg, with ease.
Furthermore, he claims clearing credit card debt will be able to be accomplished faster thanks to sweeping.
This will give savers the chance to avoid charges from late payments and accrual of extra interest.
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“If you have money in your current account, and you want that money to be put to work for you, you can earn interest in a savings account.
“Your bank can do that for you. In some cases, you can persuade your bank to sweet talk you into a savings account.
“With VRP sweeping, that opens up to the best product in the market with third parties being able to set up these sweeps so that your money can be put to use for you.”
According to Mr Barrigan, banks are set to lose out with the introduction of sweeping as their role as a third-party in payment transactions will be diminished.
He said: “Whoever you bank with is probably the party that benefits least from this, because they can already move the money between accounts.
“What people should look out for is the competition and getting the best product in the market.
“They should look out for innovative new products, those that provide the best savings rates.”
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