What is an IAN?

8 December 2021

For wondering about the significance of Ian Beale, he is an anti-hero character from the East Enders cinematic universe.  Think the UK equivalent of Marvel or DC.  He also shares a name with the latest development from Pay.UK – IAN or Interactive Advance Notice which is not nearly as attractive as a picture of Ian Beale hence the clickbait.

However, IAN is far more useful. It is the soon-to-be-released communication standard that will make the use of Direct Debits easier by enabling greater dialogue between a biller and payer. It’s estimated that IAN will help British businesses save an estimated £8.1M in Direct Debit indemnity claims.^[1]

How it works

Leveraging the Request to Pay standard created by Pay.UK in 2020, a biller will be able to send the notice prior to Direct Debit payments being taken from the customer.  The customer then receives it securely in their mobile banking app and can review the details.  If for some reason, they don’t recognise the payee, say for example if the biller is using a payment facilitator whose name appears instead of the billers, then the customer can query it by sending a return message from their banking app to the biller.  This is instead of the payment being taken and the customer trying to claw back the funds post transaction due to the unrecognised name.

Another issue for customers is the inflexible nature of Direct Debit.  You sign a mandate at the time of purchase committing you to a regular date when payments can be taken.  These mandates last until either the customer or the biller cancels it which could be years if, as a customer, you’re particularly loyal to a supplier.  During that time many things could change which would mean that the original date is no longer convenient.  IANs provide a mechanism to request a date change without having to cancel and then reinstate the mandate.

The key here is the two-way, secured communication between payment provider apps, rather than vastly less secure email/SMS.  It enables new experiences so that we can avoid failed payments, particularly that first payment after when a mandate is newly created.  It also accelerates the acceptance of Request to Pay within the industry, which is great news for customers. With greater control of payments than ever before, they can ensure they don’t miss important bill payments and mitigate the risk of payment fraud.

Request to Pay is taking off in the UK. joining similarly successful regions that have adopted the solution including the US, Europe, Australia and India.  With the introduction of IANs, businesses can differentiate themselves by offering improved Direct Debit services. Turning on the additional features of Request to Pay allows them to also serve the portion of the customer base that does not use Direct Debit, often driving up significant processing costs.

Read Pay.UK’s article to learn more about the topic