17 June 2020
Request to Pay is gaining momentum thanks to Open Banking and PSD2
His own banking environment
RtP is a framework containing digital messages from the payee to the payer, including a commercial transaction and a possibility to initiate a payment. Through RtP, a payee can send a payment request to a payer who can approve and pay in his own banking environment. Unlike direct debits, RtPs are real-time and also suitable for one-off payments. The payment request can be sent via various channels, for example via SMS, email, via a company's app and ultimately via your own online banking environment. The payer can decide when and if he wants to proceed to a transaction.
RtP is, for the moment, particularly interesting for companies that often work with direct debit. Think of utility bill surcharges or insurance copayments. Nowadays, it is still quite a hassle to arrange this kind of payments; you need to send out a paper invoice and hope that the customer type in the correct reference number, or else it might become an administrative nightmare. RtP makes it possible to make a direct link with the ERP system of a company, so that payments automatically match with the business administration. Through RtP these payments are safe and fast with low costs and high efficiency.
Convenience plays a major role
The benefits are not only visible for the payee, but also for the payer, because convenience plays a major role. After all, one click is all it takes to pay safely. This brings another benefit, which is the tendency of the consumer to pay directly. In other words: the conversion goes up, because it takes so little effort. And in the future, the possibilities can be expanded, for example by adding a function that enables the payer to pay in full or in part, or to refuse and ask for a dialogue with the payee. This gives the payer more control.
The service consists of a messaging section and a payment section. Via the messaging section, the request for a payment is communicated to the payer. A payment request can be sent electronically via internet but can also be implemented on top of a bank's infrastructure. The advantage of this last option is the fact that you receive and pay from the trusted bank environment.
No standard yet
At the moment there is no standard for messages via the bank’s infrastructure yet. Pay.uk and the EPC (European Payments Council) are currently working on a RtP scheme, but it will take time. For now, equensWorldline can facilitate the messaging service via the electronic route, without a scheme, due to a partnership with AcceptEasy (now part of Serrala solutions). Later, if there is a standard, equensWorldline will also develop a solution according to the scheme services for Rtp providers. That means that we can offer clients the option to use electronic requests as of now and later add the service that makes use of the bank infrastructure.
equensWorldline is currently able to process Payment Initiation Services (PIS) and Account Information Services (AIS) that comply with PSD2 guidelines throughout Europe. This means that a customer can initiate a payment via a third party provider (TPP) directly from his online bank account which is a (instant) credit transfer.
As a result, this payment method is currently suitable for pan-European payments that work for everyone, because nearly everyone in Europe has a bank account (while other payment means have less coverage)). This makes it safe to say that PSD2 and Open Banking positively influence the development of RtP, because the link to a bank account is now easier and safer to establish.
As RtP solutions gain momentum, they could be one of the payment solutions in the Open Banking era to compete with existing payments. To be continued.