Request to Pay

Request to Pay (RtP) promises to rewrite the rulebook on everything from bill payments to invoicing, offering a single, secure overlay messaging service that offers payees greater flexibility and choice over the ways they choose to pay.

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What is Request to Pay?

Request to Pay (RtP) is an emerging innovation that allows businesses and consumers to communicate more openly and effectively around the settlement of payments. RtP promises to overwrite legacy methods of bill payments and all the problems incumbent with them.

Dovetailing with other innovations such as Instant Payments, RtP gives customers the ability to choose whether, when and how to make a payment, according to their needs. Recipients, meanwhile, benefit from reduced instances of reconciliation, greater oversight over revenue streams and improved security.

How does it work?

With Request to Pay, the customer and the recipient electronically exchange structured data through a Request For Payment (RFP) before then proceeding to exchange funds. Key transaction details, such as the date a payment will be made, whether the funds will be paid in installments, and the means by which the customer intends to pay can be arranged via an encrypted messaging exchange.

Transaction initiated

The transaction process starts.

Request to Pay

The business sends a message requesting a payment.

Acceptance or Refusal

The customer accepts the request and chooses how and when to pay, or refuses.

Payment

The payment completes via the customer’s preferred method.

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87%

Nearly 9 in 10 banks in the UK see RtP as a great alternative to traditional settlement methods such as Direct Debit.

18%

Despite its popularity, less than 1 in 5 banks have already implemented Request to Pay. Only a further 27% believe they will introduce it in the next 12 months.

54%

Over half of banks cite legacy infrastructure restrictions as their key barrier to implementing Request to Pay.

The benefits of Request to Pay

Request to Pay opens the door to a wide range of use cases. What connects these use cases are the shared benefits, which will include reduced costs, greater customer autonomy and increased transparency. Request to Pay is industry agnostic, meaning its impact will be felt across the entire business spectrum. Moreover, with RTP, customers will benefit from more secure transactions, less stress and greater visibility over their finances.

Reduced costs

Request to Pay will rewrite the process of billing and invoicing customers, creating a fully digital, cashless experience. This will allow customers to easily and quickly reconcile payments, whether by making a straightforward, instant payment, or choosing to pay in installments. Payees will therefore spend less time and effort chasing and reconciling payments, leading to cost savings.

Streamlined cash flow

Working within a wider interoperable network, Request to Pay dovetails with Instant Payments to ensure that inbound payments are settled instantly. By automating the RtP process, payees can ensure that their end-to-end payment pipeline is smoother and more efficient, with funds settled instantly, offering total visibility over cash flow.

Fewer missed payments

With a digital platform supporting the Request to Pay, businesses can reduce their dependencies on traditional methods of payment requests such as paper bills and emails. Instead, the platform will send customers automated, real-time reminders and offer them flexibility in the way, ensuring fewer payments are forgotten.

Improved customer experience

By offering customers flexibility over the way they pay, businesses can use Request to Pay to create customer-first payment experiences. Customers can manage their payments in a way that suits them, without feeling harassed by constant mail and email reminders.

The scale of the opportunity

Request to Pay will revolutionize the way businesses send and settle bills and invoices. With Instant Payments providing quick reconciliation and customer-centric digital portals easing the burden of chasing payments, Request to Pay will ensure smooth, seamless payments.

Banks offering this service to business customers stand to gain a competitive advantage, providing an in-demand service for corporate customers.

96%

of payments professionals said they were interested in Request to Pay according to a survey by the Euro Banking Association.

Use cases for Request to Pay

Point of Sale

Request to Pay could enable the transfer of funds at a physical point of sale. Empowering the secure transfer of funds in real time, Request to Pay could overtake card payments, checkout finance and of course cash as customers’ preferred means of payment – especially for large and expensive items.

Invoicing

Request to Pay could disrupt the traditional method of invoicing, whereby the supplier submits a paper invoice to their client. With a digital platform replacing the paper trail, and with customers having the option to pay instantly, or stagger payments, RTP could incentivise the development of new, more efficient invoicing terms.

Online checkouts

Customers could be given the option to choose a Request to Pay service at online checkouts, allowing them to pay instantly or choose structured payments (similar to checkout finance). This form of payment gateway may prove more cost effective for merchants than legacy methods.

Key challenges

Despite the opportunity Request to Pay offers, many payments professionals are apprehensive about implementing Request to Pay. Developing a successful RtP proposition in your organization is endemic upon tackling these issues head-on.

Integrating with legacy systems

Many financial institutions and businesses rely on legacy payment systems, which may not be capable of easily implementing Request to Pay. The time and cost involved in updating or even replacing legacy systems may be perceived as outweighing the potential benefits of RtP.

Regulatory compliance

New technology comes with new risks, and RtP is no different. Financial institutions and businesses must be prepared to ensure their RtP platform is compliant with regulations and including anti-money laundering and know-your-customer.

Fraud prevention and cybersecurity

The increased speed and volume of real-time payments including Request to Pay opens the door to new forms of fraud, such as Authorised Push-Payment fraud. Banks and financial institutions must be prepared to counter fraud through means such as Confirmation of Payee.

Business transformation

Introducing Request to Pay to market will require financial institutions to establish new operational centres, to communicate effectively with customers and clients, and to ensure total up-time for products. This will not only incur costs, but will necessitate the development of new working practices.

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