Where does Request to Pay go from here?

16 June 2022

Request to Pay (RtP) is the new messaging interoperability protocol being adopted across the UK to simplify bill payments. It’s been around for a couple of years now but—as this month the UK financial service industry is focused on FinTech North’s Future of Payments conference—we take a step back to consider where RtP goes from here.

No time like now

Few could argue that there could not be a better time for RtP to arrive. The latest economic figures suggest that inflation is currently running at 9% and are set to hit 10% within weeks. At the same time, pay packets excluding bonuses, grew by just 4.2% in the first period of 2022, so regular pay has effectively dropped by 1.2% in a year.

With a growing cost of living crisis, giving bill payers the means to bring their bills together in a single app… well, that has to be a good idea.

Set aside the convenience Request to Pay provides in managing bill payments for consumers and small businesses alike, another reason why it is taking off comes down to its data security advantages. Banks and financial services providers are under pressure to deliver mobile bill payments. The only alternative to using RtP for banking apps is to add an unsecured link to a payment website that can easily be intercepted, or the landing page spoofed. With bill payments fraud on the rise, the last thing providers need is to recommend users to click on unsecured links.

Request to Pay—the story so far

Request to Pay in the UK landed in 2020 and has taken time to take off. There have been a number of reasons for this.

The first comes down to practical resourcing pressures within banks and financial services businesses. Bluntly, there is a lot of competition for time and priorities in IT teams presently, as they emerge from the pandemic with huge backlogs of postponed projects.  

We also know that the adoption curve of similar innovations like Open Banking and contactless payments have a similar ramp up phase, before gathering pace as their value is understood by a broader audience. This is due in part to the many moving parts of the payments industry—it takes banks, consumers, service providers and billers to all step forward in or around the same time to see adoption happen at scale. After humble beginnings, contactless is now embedded in how we do business, while Open Banking now has 6 million customers. We can expect Request to Pay to exhibit a similar demand curve over the same timeframe, to the point it becomes embedded in our daily lives.

Request to Pay in 2022

At Answer Pay, we’ve seen Request to Pay turn a corner in 2022. Enquiries have increased for our ready-to-deploy flavour of RtP, and the curiosity seen last year has turned into adoption. Admittedly, a few things have changed over the past 12-months that have led to this faster pace of Request to Pay adoption in the UK.

The global move to digital payments

Demand for modern bill payment alternatives, particularly mobile bill payments, is leading to widespread adoption of request-based bill payment protocols around the world. For example, last year, the EU launched its SEPA Request to Pay (SRTP) scheme. The growing tide of adoption is causing banks and service providers to recognise RtP is the ‘when not if’ direction of travel for the financial services industry.

Bill payments fraud

I mentioned it earlier, but fraud is growing at a pace. Banks know that keeping data safe for their customers is not only an obligation, but offers a competitive advantage. Consumers need assurance that their bill payments are conducted in a data safe environment. Unlike pay by link solutions that grants anonymity of parties, Request to Pay offers more security because the identity and privileges of the parties involved is known.

Creating a channel for two way communications on bill payments

Imagine the scene: A housewife (or househusband) receives a request for payment from a supplier, checks out their bank balance and decides they have sufficient funds to settle the bill in full. They pay the bill. Moments later, another bill arrives (potentially YOUR BILL) but, by this time, the coffers are empty and the only presented option is to delay payment. This leads to new charges, adding more pressure to a budget that’s already stretched to the max.

Request to Pay allows bill payers to have full visibility of all their bills in one place (normally on a banking app on their smart phone).

Bill payers have the transparency of knowing what funds they have in their budget and what demands they face when it’s their time to pay the bills.

Much has been said recently of the rise in financial vulnerability. Helping bill payers fully grasp the dynamics of their income and outgoings encourages smarter budgeting decisions. Empowering customers to control when money leaves their account means the biller has greater surety of being paid, rather than the expensive process of failed direct debits and credit control processes.

Request to Pay in 2023

As the bell curve of adoption of Request to Pay is progressively pointing further north, banks and financial services are getting to that leader or laggard decision phase. It is now beyond doubt that we will see the adoption of RtP as the standard for digital bill payments in the UK. There are compelling arguments for convenience and data security it provides. We have reached an ‘if not now, when?’ decision point.

Given the pressures to deliver above and beyond customer service experience in mobile banking, for bank and financial service leaders, not moving to RtP in 2023 might just turn out to be a career defining decision.