Blogs > What is Request to Pay and what are the benefits?
17 May –

What is Request to Pay and what are the benefits?

Request to Pay is growing in popularity across the globe. Why is this new method of payment seeing success and how can firms capitalise?

Alex Hamilton

Request to Pay has emerged as a powerful real-time payments channel useful for organisations, merchants, banks, acquirers, and billers. Rollouts are occurring across the world, and a greater number of financial institutions are deploying the system to offer value-added services to their customers.

Request to Pay isn’t a new payments rail but a specification and messaging service able to sit atop existing payments infrastructure – most often credit cards and faster payments systems. It allows firms to better communicate with customers and provide greater options for transactions.

You may have seen Request to Pay listed under a variety of names globally, these include:

  • RTP (UK)
  • Request 2 Pay or R2P (Europe)
  • Request for Payments (US)
  • Collect (India)

Pismo is ready to help all banks, fintechs, and payment providers thinking about deploying this game-changing solution.

How does a Request to Pay solution work?

Request to Pay involves a payee initiating a request for a specific transaction from a payer. The system provides a digital request that the payer can receive on their mobile device. This could arrive on a mobile banking app, or via a third-party fintech.

A payer is then able to accept or reject the payment request. Depending on the region, the request may also include the transaction details, due date, or other invoice details. If the payer approves the payments, a real-time transfer is initiated to the payee. 

All in all, Request to Pay provides a rapid method of enabling transactions between two parties, without the need for remembering or finding full account details.

Create new opportunities

In the UK direct debit payments are slowing in usage. Yet more people are entering into the gig economy, with 7.25 million in the industry. As billers and payers search for ways to quickly and securely transact, Request to Pay has the potential to step into the gap. According to Accenture, more than 1.3 billion non-direct debit payments were made in 2020.

Request to Pay can be deployed to drastically reduce the leg work a consumer must do to make their everyday or important payments. Users are often searching for a range of different options or menus to make their everyday payments.

Imagine instead if their bank sends a push notification, identifying the payee, transaction type, amount, and expected due date. A customer can log in and select from a range of customisable options for their payments: accept, reject, delay to a later date, or assign to a separate account. Working with suppliers, a bank can become the payments hub for their customers, offering a greater experience.

Equally, adopting Request to Pay capabilities can benefit businesses. Supported by instant payment schemes, merchants can improve conversion rates and receive immediate funds, rather than rely on direct debit transactions or other, slower methods of payment. 

This also provides consumer banks with an opportunity to drive new revenue streams through partnerships with new fintechs, social media companies, and new providers like Buy Now, Pay Later (BNPL) firms.

Grab the opportunities

Despite its benefits, industry adoption of the payment method remains at a low figure. This is mainly due to payment service providers finding themselves unable to deploy the product on legacy technology.

Existing infrastructure in the main simply doesn’t have the flexibility to bring a unique service to market in a timely and secure manner. To launch an effective Request to Pay service, firms must look at transforming their underlying technology using the cloud.

But the results of taking that first step are clear for all to see. A massive untapped market sits waiting for effective, seamless, and secure payment services. Request to Pay may seem to some like a “nice to have” but it is these products that set them apart from an increasingly identical competition.

Unsure how you might deploy Request to Pay? Speak to Pismo today and we can help you take that powerful first step.

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