Where does Request to Pay go from here?
Issue 343 | 17 June 2022
This blog originally appeared on Answer Pay’s website: Where does Request to Pay go from here? and was written by Ian Tomlin.
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 the Future of Bill 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 cost of living crisis gradually moving down the gears, 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, given changes to regulatory frameworks, legacy systems migrations, demands for consumer apps, etc. RtP has been the ‘nice idea’ that we’ll get on to later.
All that said, we can parallel innovations like Open Banking and contactless payments to understand that adoption curves in the payments industry do take on a similar ‘slow curve’ adoption profile, but eventually gather pace when their value is understood by a broader audience. We have to acknowledge 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 5 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.
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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.
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