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Request to Pay: A revolution in UK payments

AccessPay’s recent Dispelling The Myths Around UK Payments event shone a light on some of the hottest talking points in UK payments right now. Pay.UK’s Assistant Product Manager, Jacob Tose, gave a rousing talk on Request to Pay, arguing that it will be revolutionary for UK payments.

What is Request to Pay?

The idea behind Request to Pay is simple. It lets people and businesses send a request for payment, which the payee can then fulfil via apps such as online banking apps. Payees can also choose how and when to pay. Developed by Pay.UK, the UK’s leading retail payments authority, it’s designed to hand users more control and flexibility over bill payments. It also makes the bill payment process more transparent, helping billers avoid misunderstandings.

Just think what this could do for your Accounts Payable (AP) department. Say you’ve got an office electric bill to pay. They would send you the request and your AP team would use Request to Pay to respond, then you’d have the option to settle the bill in full or in part. If you’ve got cash flow issues you could use it to request more time to pay. You can even decline to pay (say that electric bill was for your old office), making sure errors don’t impact your cash flow.

Some more details

Request to Pay will be overlaid on existing payments infrastructure, running alongside schemes like Direct Debit, as part of Pay.UK’s New Payments Architecture. It shouldn’t prove too disruptive to your business’ payments processes – it’s basically just a new service which must be paid for. Also, Pay.UK also describes Request to Pay as a “secure messaging service”, suggesting that messages sent on this tech will be safe from cyber-criminals.

Find out more by taking a look at our Beginner’s Guide to Payments.

Revealing the benefits….

At our event, Jacob gave the staggering revelation that Request to Pay could save £1.3 billion each year for the UK’s economy. Why? Basically, it offers big benefits for billers and payees alike. Let’s list these benefits…

A new level of flexibility

Request to Pay basically fills a gap in the market. In a poll of UK payments users, customers argued that there’s a need for “more choice and control over the timing and method of their payments”. That’s exactly what Request to Pay gives them – near total flexibility on paying their bills. Let’s turn back to that electric bill. With Request to Pay, you have more payment options and could even ask to pay in chunks if your cash flow is unstable.

No more waiting

This innovation could also help you shorten lengthy payment and collection processes. Suppliers, for example, take as long as 113 days to collect payments. Request to Pay provides greater visibility of what will and won’t be paid. As a Direct Debit collector, you can use this greater visibility you can plan for missed payments and act accordingly, avoiding bounced Direct Debits. This also eliminates the fees attached to bounced Direct Debits too.

Summing up this argument, Pay.UK’s CEO Paul Horlock was quoted by Finextra saying, Request to Pay will help you swerve “the cliff edges that can be created by an irregular income or an unexpected or unpaid bill”.

Time to go paperless

Speaking of savings, the electronic nature of Request to Pay offers another. It’ll allow you to utilise paperless billing; you won’t have to issue, process or track paper invoices.  Going paperless has delivered cost savings of around £1 billion for the UK’s finance industry alone each year, so this could really boost your coffers. Also, the transparency of this innovation will also allow for easy error flagging, tackling the big issue of human error.

Better ways to talk

One of the key benefits is that Request to Pay will allow customers and billers to communicate more easily. By being able to request a payment deadline extension in real-time from that electricity supplier, for example, you’ll get an answer instantaneously and can plan cash flow around that result accordingly. With Request to Pay you’ll be able to automate response and integrate it with customer service tools such as helpdesks too. This both provides customers with the speedy response times they desire from the companies they frequent and allow you to streamline communication processes so your staff can focus on other tasks.

Valuable referencing tool

Whether you’re using it to pay a bill or make a collection, there’s another way Request to Pay can help you streamline processes and save money. It offers a variety of opportunities for referencing that’ll make a task like reconciliation much easier. The biller will be able to, for instance, pre-assign invoice numbers to payment requests, providing both the biller and payee with the opportunity to automate the reconciliation process.

Potential game-changer

Get ready because Request to Pay is set to launch in 2019. This service is only in its infancy, and it’s set to evolve rapidly, so who knows what potential it holds going forward. Pay.UK has set up a sandbox to allow firms to test the new Request to Pay standards to inspire new product development, so who knows what’s in the pipeline.

Some people would like to rain on Request to Pay’s parade. But it has so much potential. It could be a game-changer for those who won’t – or can’t – use Direct Debits. The rise of the gig economy for example (which counts for 1.1 million of the British workforce according to recent figures), has made it a necessity for your organisation to find more flexible ways of billing and collecting so you can access the best talent.

Look at contactless cards. Adoption was slow until Transport for London rolled them out across their network and now contactless cards are everywhere. Imagine how Request to Pay could change your business for the better.

Vocalink Mastercard have partnered with AccessPay to find out the level of understanding that exists among corporates when it comes to Request to Pay. We’d appreciate it if you could take a few minutes to complete this Request to Pay QuestionnaireYour feedback will be used to improve the services Vocalink Mastercard and AccessPay provide.

Submit your thoughts: Request to Pay Questionnaire

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