For those not in the UK and 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 to give it it’s full title “Interactive Advance Notice” which is not nearly as attractive as a picture of Ian Beale hence the click bait.
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.
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 Debits. 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 (as I know from experience when changing jobs and buying a car at the same time!). With the new IANs it provides a mechanism to request a date change without having to cancel then reinstate the mandate
The key here is that two way communication between secured by payment provider applications rather than the wild west of e-mail/SMS. It enables new experiences so that we can avoid failed payments particularly that first payment when a mandate has been newly created. It also accelerates acceptance of Request to Pay (RtP) within the industry.
Request to Pay is taking off in the UK joining similar successful Request to Pay markets such as the US, Europe, Australia and India to name just a few of the adopting regions. With the introduction of IANs Payment Service Providers can differentiate by offering improved Direct Debit services. They can then turn on the additional features of Request to Pay allowing them to also serve the portion of the billers customer base that for one reason or another can’t or won’t use Direct Debits and often drive a disproportionate amount of their costs.
For consumers it is nothing but good news. With greater control than ever before of your payments you can ensure you don’t miss important payments or mitigate the risk of being duped by fraudsters.
Look out for a future article where we compare and contrast IAN enabled Direct Debits and VRPs