Request-to-Pay is an emerging messaging framework that is becoming increasingly popular as a value-added service for real-time payments. As the name suggests, this solution enables payees to request payments digitally from consumers, which the latter can choose to either accept or reject.
Even though this innovative service is not available in all countries across Europe yet, it has already raised discussions among industry experts. Many of them agree that Request-to-Pay is a game-changer for European payments. Read ahead to find out what makes this solution so significant and how it is likely to influence the market.
The Implementation of Request-to-Pay Across the Globe
The Request-to-Pay scheme’s implementation models vary depending on the country. Here are some examples:
- Australia is a leading market for Request-to-Pay services, with 60% of the continent’s population and over 60,000 businesses using BPAY, a mobile banking-based solution for billers and payers1.
- India’s Unified Payment Interface (UPI) is one of the most successful Request-to-Pay solutions to date, with over
100 million monthly active users2.
- The USA’s Clearing House is a single integration point for local banks that connects them to a real-time payments service. It also features a solution called “RTP® Bill Pay”, which is a Request-to-Pay ecosystem that became available to millions of US bank customers at the beginning of 2022.
- In the United Kingdom, the Pay.UK standard that regulates the Request-to-Pay framework was launched in May 2020 after a design process involving stakeholders from biller and payer communities. Under its guidance, the RtP scheme is expected to save the UK economy between
£2 and £3 billion3.
- In Europe, Request-to-Pay is tied to the Single Euro Payments Area (SEPA) payment rails and is governed by the standard released by the European Payments Council in June 2021. At the moment, Request-to-Pay services in Europe are only available in Euros, although there are plans to expand the scope to non-Euro markets.
As you can see, Request-to-Pay is a fairly new initiative that still has a lot of space for improvement and expansion. However, already today, it is clear that this service will be revolutionary for the global payments landscape in the long run.
How Is Request-to-Pay Influencing Transactions in Europe?
The SEPA Request-to-Pay (SRTP) is undoubtedly an important milestone in the European payments market. This is especially true for the B2B context, where this solution can contribute to the development of electronic payments.
That’s why some French corporate treasurers in the energy field already refer to Request-to-Pay as one of the key assets for the reduction of payment delays. The SRTP scheme is also likely to play a critical role in Germany, where enterprises and financial institutions aim to digitize invoicing and payments in the B2B context.
Aside from that, there are other use cases of Request-to-Pay in Europe, namely:
- The creation of an alternative to SEPA Direct Debit (SDD). Combining RtP services with instant payments will help to promote digital transactions in countries where traditional payments are prevalent. One example of such a market is Portugal, where around
40% of consumers pay for electricity with SDD.
- Upgrading payments for public services. Request-to-Pay, combined with instant transactions or standard SEPA Credit Transfers, could play a part in modernizing traditional payments to public administration, such as covering taxes, fees related to healthcare, and various penalties.
- The optimization of recurring payments and Buy Now, Pay Later (BNPL) transactions. The Request-to-Pay service is expected to simplify different types of electronic payments and become an optimal solution for younger generations of users who value digital tools and mobility.
Knowing the variety of benefits and spheres of implementation linked to the Request-to-Pay scheme, it is only natural to wonder if this service will eventually take the place of some traditional payment methods. Find out the answer below!
Will Request-to-Pay Replace Traditional Payment Methods?
As history shows, payment habits and preferences are not easy to change. One good example is the fact that even though the European market is rich in initiatives that could have replaced payment checks, this payment method is still being actively used for both B2B and B2C transactions in many countries.
Thus, even though Request-to-Pay has all the qualities it takes to replace some payment options, it is neither a simple nor a fast process. However, what it can do in the foreseeable future, is optimize the way payments are made worldwide.
With a multitude of countries noticing the potential this innovative solution holds, we are sure to see the Request-to-Pay scheme featured in even more projects on both national and international scales in the upcoming years.
1 - Pay.uk - Around the world in Request to Pays
2 - Answerpay - Request for Payment Adoption Around the World
3 - Pay.uk - Request to Pay