Request to Pay –
The Global Picture
A market insights report into Request to Pay adoption around the world
Read our complete guide to Request to Pay adoption around the world
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Updated January 2022
In This Guide
This is an abridged version of our market insights report into the global adoption of Request to Pay solutions. To obtain the full report, please download the PDF version. This guide includes the following sections:
Section 1 - Introduction
A concise overview of Request to Pay:
State of the Market
How it Works
Section 2 - Around the World
European Union (SEPA)
United States (Clearing House /RTP Bill Pay)
United Kingdom (RtP)
Section 3 - What it Means
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Section 1 – Introduction
Request for Payment standards are being adopted by economies around the globe
Request to Pay (RtP) is a messaging ecosystem that provides the necessary secure interconnecting communications required to make secure payment requests possible.
RtP reduces the cost of managing bill payments by offering customers their choice of payment method through one integration.
Traditional payments require customers to visit a biller or merchant checkout and initiate a payment. With Request to Pay this process is decoupled so that a biller can initiate a payment request and a customer can choose where and how they pay.
Adoption results in easier bill payments and happier customers. Banks and Payment Service Providers (PSPs) can increase engagement with their client base by becoming the foundation of their bill payment experience.
Why Now? (UK Example)
- There will be 7.25m people working in the gig economy in the UK in 2022 (HM Gov data)
- In 2020, 1.3 billion non-Direct Debit bill payments were made (Accenture)
State of the Market
Billers have challenges in digitising the bill payment process, managing reconciliation and offering all the payment options customers desire.
Payers want more control over the payment experience e.g., when payments are made, what payment methods are used and how to manage them across different suppliers
Illustration of the Request to Pay process (UK)
- Lower cost, fewer cash and cheque payments to reconcile
- Improved cashflow, through digital payment transfers
- Surety of payment, by offering more ways to pay
- Empowerment, with more control over payment decisions
- Lower cost, avoids the poverty premium for underbanked communities
- Safer, removes the use of email and SMS based pay by link alternatives sometimes used by mobile payment apps
OneBanks is deploying Request to Pay across its bank branch network to bring simpler payments to underbanked communities
The Money Carer Foundation is connecting the financially vulnerable to digital bill payments with RtP, implemented by Answer Pay
Section 2 – Request to Pay Around the World
Request to Pay solutions are taking off around the world, redefining possibilities in the digital bill payments industry.
The world is waking up to digital payments as the answer to convenient and affordable digital bill payments. Request to Pay solutions are expanding globally.
The Pay.UK standard was launched in May 2020. Answer Pay were the first adopters of the UK standard in June of the same year. Characteristics of the UK implementation include:
- A messaging channel
- Communication from secure application to secure application.
- Decentralised repositories managing participant identities and message routing
- Payers are required to create a new ID
- Payment method agnostic – Payers can pay with any method they like. Payer apps then send a bank transfer to the biller, so they only have one process to manage
- Mandated payer displayed options – great for bill payment but it does mean that it may not be suitable for eCommerce scenarios
The United States
The Clearing House is a pre-existing single integration point for US banks that connects them to an instant payments service. On top of this, they have developed a service called “RTP® Bill Pay”. What’s exciting about this implementation is the intention to adopt by 23 US banks representing 40% of the US consumer market.
Characteristics of this solution include:
- Lack of payment method options – only account to account payments
- Reduced payment options e.g., ability to set a future date of payment exists but not the ability to request a payment deadline extension
- The use of ISO20022 standardised messages (also used by SEPA RtP)
- The customer identifier that they share with their biller for message delivery is their routing number and account number (pre-existing bank credentials)
- Centralised routing via a single party
The European Payments Council released its SEPA standard in June ‘21. The EU is pressing for Request to Pay, so much so it may mandate legislative action for it to be adopted. Whilst similar to the UK implementation, there are some differences:
- Tied to SEPA payment rails (either directly or Open Banking)
- Only available in Euro although plans to expand for non-Euro markets
- No additional payment options for the payer, simply pay or don’t pay
- Not limited to financial service providers – e.g. eInvoicing companies can become scheme members
- No new ID for payers – payers need to specify their payment app and their unique ID for that app to permit message routing
Australia has an incredibly dynamic payments market, exemplified by the fact that today nearly a quarter (24.1%) of all online purchases involve the use of a digital wallet.
- Australia is a lead market for digital services with BPAY
- 60% of Australians pay their bills today using BPAY
- How it works:
1. Customers log into their mobile or online banking app and then select which billers they wish to receive their bills from and their account number with that biller organisation.
2. The biller then using their service provider initiates a request for payment.
3. The biller service provider sends the relevant requests to the BPAY hub which routes the request to the appropriate payer financial service provider.
- An instant real-time payment system developed by the National Payments Corporation of India (NPCI)
- Launched in August 2018
- In June 2021, UPI recorded 1.94 million initial public offering (IPO) mandates that increased to 7.66 million in July
- Today it surpasses America Express as the preferred method of bill payment
- Discussions are ongoing to operate UPI in the United Arab Emirates and Singapore
Section 3 – What it Means
Moving along the bell-curve
Request to Pay has become a global movement with significant ground being made in those markets that have deployed early.
Whilst conceptually these territory-specific deployments all have in common secure messaging to apps rather than email or SMS, they also have fundamental differences.
It means banks, PSPs and other large multinationals looking for a simple roll-out will need a technology partner that can supply a single point of integration across these standards and handle the complexity of translating the messages.