Your life on mobile
Before exiting the house, most of us today reach of our wallet, keys, and mobile phone. Strange to think there was life without mobile phones in the 1980’s. Stranger still, that Britain’s first mobile phone call was allegedly made across the Vodafone network on 1 January 1985 by veteran comedian Ernie Wise.
Since then, mobile phones have made their transition to become ever more personal computers from which members of our digital society lives their lives. Most fundamentally, mobiles have become the primary trusted source of identity. Scary if you lose your phone.
In 2019, there were thought to be around 80 million mobile subscriptions in the UK and, if the industry pundits are correct, only two percent of households are without a mobile phone, while one in five have four or more mobile phones in the house.
Mobiles and payments
Mobiles are convenient to do those things in life we do everyday, stay in touch with friends, catchup on the news, book flights and holidays, place a bet, order up a takeaway, and manage our domestic bills. But, when it comes to organizing and paying bills—merging the wallet and the mobile phone into one—the technology of mobile phones has proven to be somewhat harder to tame.
Of course, we have a multitude of ways we can pay and want to pay. Advances in Near Field Communications (NFC) technologies mean that we can all now use digital wallets on smartphones with apps like Apple Pay and Google Pay to settle our coffee bills, and banking apps to settle long-standing monthly bills. Sometimes, we need to request money, and ask for money. Technologies like PayPal’s money request service mean that we can do that to, by going through their mobile app to securely request and make payments to friends, relations, and settle the occasional eBay purchase.
So good so far, but when it comes to managing a blend of different bills, particularly for those who are short on cash, the mobile phone has lacked a robust way to prioritize and make payments—until now.
Safer mobile bill payments for the vulnerable
According to research conducted by Institute for Public Policy Research, in the United Kingdom today, one in six working households—or 17.4 percent— are living in poverty, 1.5 million consumers are in water poverty, over 20 million people are claiming state benefits, and over 1 in 5 pupils (1.7 million) in England are eligible for school meals (as of Jan 2021).
The FCA’s Financial Lives survey presents startling figures that 46% of UK adults display a characteristic that could make them vulnerable. Let’s put that into perspective. With the UK’s population hovering around 67 million, that means 1 in 3 people at the end of each month have to make tough decisions on where their money goes.
For many, the monthly activity of settling up tabs means writing cheques, paying with cash, and taking risks on Pay by Link requests from billers who know only too well that the webpage they land on might be a fake designed in a bedroom by a hacker over the weekend: One of the reasons why the UK’s banking industry, led by Pay.UK, and encouraged by the Financial Conduct Authority (FCA), have come up with a new hub and spoke messaging platform ecosystem for payment requests by mobile phone called Request to Pay.
Request to Pay—Safer bill payments by mobile phone
Request to Pay (‘RtP’) is a new form of digital bill payment that joins up the communication part of bill payment (sending/receipt of invoice) with the payment. We’ve recently launched a demo of what this look likes but an overview of the process is below.
It’s not possible for consumers or billers to instantly access Request to Pay: It’s background ‘plumbing and pipes’ technology that hides in the mists of banking systems. Its function is to lay out the messaging constructs and interoperability protocols that manage the secure messaging infrastructure, permissions and transactions that need to happen between bank, biller and payer systems. This means banks and PSPs have to enhance their existing payment systems with RtP technologies and protocols in order to provision these services. Fortunately, pioneers like Answer Pay have already put in place the retrofittable SaaS tool-kit needed to make this transformational journey less painful.
Once your bank or PSP has upgraded their systems, the security, convenience and empowerment of Request to Pay payments, it means you’re likely to access these services via a secured mobile banking app or digital wallet system.
RtP is ideally suited for banks and payment service providers to provision services to bill payers who want to have more control over which bills they pay, and when they pay them. That’s good news for the 1 in 3 vulnerable bill payers of the UK.
Instead of receiving unsecured Pay-by-Link requests out of the blue from billers, using Request to Pay platform services, vulnerable payers enjoy a series of safeguards to make sure they are in control of their spending priorities, and that transactions don’t get lost in the banking system, or run the gauntlet of phishing attacks and hacker threats.
Why Request to Pay is Empowering
RtP based services promise to be more empowering for the sizeable community of financially vulnerable individuals because the technology allows them to use a trusted mobile phone app to make payments anytime. Additionally, banking and digital wallet apps can be designed by bank service providers to allow payers to request a part payment when they’re struggling to make ends meet. Furthermore, the RtP platforms allows billers to engage their audience in ‘a conversation’ so payers have the opportunity to share their financial challenges and come to a sensible go-forward solution they can manage.