How Request to Pay will change the landscape of bill payments

5 August 2021

Arguably,  the biggest change to our daily lives in our lifetime has been the proliferation of mobile telephony and the always-on socio-digital culture.

Mobile phones have become key to identifying ‘us’ in a world of digital. Their multi-colour covers define us. Their notifications punctuate our lives. And, unsurprisingly, we want to be able to do everything on our phones, from recording the morning run, to paying our bills.

You and I both know that data security is one of those subjects that keeps prodding you in the back of your mind, reminding you that this reliance on the tech in your pocket can create a backdoor into your personal digital world that hackers can exploit.

In the last 6 months, if your experience has been similar to mine, you’ll have seen notifications coming to your phone from Royal Mail, advising you that they’re holding on to one of your parcels, and that you owe them some cash if you want to receive it the last mile.

Action Fraud, the UK’s national reporting centre for these types of crimes, says that between June 2020 and January 2021 it received 2,867 crime reports mentioning DPD, and that victims reported losing £3.4m over the same period. In December, the equivalent of 533 fake DPD emails a day were sent on to the suspicious email reporting service, which was launched last year.

Maybe, you’ll also have received one of those annoying emails from a friend you’ve lost touch with that informs you they’ve suddenly decided to send you a link to something you’ve never heard of before without explanation. For me, the crowning glory of this era of unwanted notifications happens when I receive a notification that someone sent me a fax message out of the blue.

Through their relentless attempts to ruin our day, hackers remind us constantly that links aren’t safe. But then, we want to put this to the back of our minds when it comes to using our mobiles to get things done on the hoof.

In the digital age, some activities stand out as being ‘analogue’ and rather curiously silly. One of those is paying bills. It costs the government and companies millions of pounds every year to send out bills and process payments. According to the latest UK Finance Bill Payments Report, there were 35.3 billion consumer payments in 2019, and 4.7 billion business payments. Those figures continue to go north despite the attempts of a certain virus to derail the economy.

Not everything has gone digital. There were still 272 million cheques used in the same year to pay bills. It just shows that something is missing. This is where Request for Payment comes in.

Request to Pay in the UK

Request to Pay is an emerging method of settling bill payments digitally. It acts as a messaging service through which people, organisations, merchants and banks can send a request for payment. RtP is a more secure way to send and request payments, replacing ‘pay by link’ requests billers send out via email and SMS.  The problem with ‘pay by link’ is that it made it easy for hackers to send you to a false landing page that closely resembles your bank or biller payment screen; to then request your ID details and steal your identity.

According to the last major research report into UK cyber crime—the ‘Cost of Cyber Crime’ report 2011, sponsored by the Cabinet Office—cyber crime cost UK businesses in excess of £21 billion.

The rise in cybercrime highlighted that another method was needed. There was a demand for a system that can better manage the messaging that transports payment requests to and from people who pay bills via mobile. Fortunately, the UK FinTech industry, led by Pay.UK and pioneering tech innovators like Answer Pay, has come up with a smarter way to make bill payments simpler – Request to Pay.

Developed by Pay.UK in consort with the UK banking and FinTech industry, Request to Pay is a new and secure method of transacting requests for payment by mobile phone (or other smart device).

Unlike Pay by Link solutions that expose consumers and small business bill payers to fraud risk, Request to Pay messaging is a set of protocols and technologies that can be embedded into the app ecosystems banks and payment service providers use to facilitate bill payments. Users of Request to Pay are able to receive payment requests and make payments from inside the security wall of their mobile phone apps. Use of authentication techniques (like two-factor authentication), mean that users don’t have to click on unfamiliar, potentially risky links.

There are advantages beyond the security story too. Bill payers have their bills curated into a single app space, and the financially vulnerable are afforded more choice over which bills they want to prioritise. For billers, Request to Pay cuts out a lot of cost in the back office, by moving payers away from analogue bill payment methods that cost a fortune to administer. They also dramatically reduce bill reconciliation complexity. Hardly surprising then, that 1 in 3 financial services professionals are thinking about how to approach new payment initiatives.