An early Christmas present to European payments industry nerds (myself included) landed on Tues 30th Nov, with the second iteration of the European Payments Council (EPC) rulebook.[1]
Using ISO20022 standards for Request to Pay (RtP) messages as a baseline, the EPC launched scheme rules that govern how those messages should be used and how participants interact with one another. Since being introduced in June this year it has seen its adoption by at least 15 different technical providers, a necessary precursor to bank adoption. We’ve also seen the Berlin Group propose an API standard as part of its Open Finance suite of services demonstrating the industry interest in this service.[2] Couple this with the regulatory tailwinds such as the mandating of eInvoices in France and speculation of a European Commission mandate around use cases that stimulate SEPA instant adoption (such as Request to Pay) and it looks to be exciting times for the EPC team.
The UK has its own home bred alternative in the shape of Pay.UK’s Request to Pay. Launched in June 2020, it has some key functional differences to the SEPA RtP scheme which we discussed here. With these latest changes, SEPA RtP now provides competition to the domestic Pay.UK scheme giving PSPs the choice of which flavour suits them the best. Answer Pay supports both and has an end to end demonstration of the two services for those who would like more information.
With that context in mind, I’ve highlighted the major changes and detailed why it is relevant to the UK Request to Pay market.
Currency Agnosticism
The first iteration of SEPA RtP made the scheme specific to the Euro which excluded the scheme application in a number of markets including Denmark, Norway, Poland and Romania. Now it is agnostic to the currency it makes it possible for those markets but also for the UK and GBP which is still part of the SEPA list of countries.
Payment Method Flexibility
A potential limitation of the original version of SEPA RtP was the mandating of the use of SEPA payment rails. This was a major difference from the Pay.UK standard which took a payment method agnostic approach.
This all changes for SEPA RtP, in this second iteration, to enable connectivity to domestic schemes such as Faster Payments in the UK. However, the biller/payer experience relies on the biller specifying in advance which payment rail they want to receive the funds over with the ability to specify multiple in priority order.
Populating URLs
One of the pushbacks from talking to corporate PSPs in adopting Request to Pay is the conceptual leap of sending requests for payment rather than the processing of the transaction itself. Are you still a payment service provider if you collect funds rather than process funds? Well yes, but one way to have both is payment URLs as demonstrated by fraudsters around the world.
The trick here is that within the Request to Pay framework the messages are being sent between validated parties so you can trust the originator rather than in the world of SMS and email where nobody knows you’re a dog[3]. So the addition of a URL to Request to Pay means that the biller can send out the Request, including the payment link. The Payers application can receive the request and then open the link to the billers payment page so the payee can process the payment directly.
You may also want to use URLs to avoid sharing files between various parties. These files may contain invoices and may contain personally identifiable information. As such, it is good practice to limit the information being shared and URLs may be one way to avoid files being stored by multiple parties.
For these reasons Pay.UK introduced the ability for the biller to send a URL with the payment request. SEPA RtP has followed suit but taken things one step further by requiring the payer app to provide a response to detail how it will treat the payment link. If the payer app is unable to display it the biller or biller PSP can then decide whether they still want to issue the request.
These three changes for me represent the biggest ones made between the two versions of the SEPA RtP scheme. It’s exciting to see competition at the standards level so we can give customers the best possible experience.
Should you decide that you want to adopt the Pay.UK RtP scheme, SEPA RtP scheme or both, Answer Pay is here to help. Get in touch with us
Ian Tomlin
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