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How Request to Pay Improves the Bill Payment Process

Every year, our reliance on technology grows. Software, automation, and instant gratification at the click of a button have become the norm, and many of our brightest minds work to innovate and create new technology that meets and exceeds our expectations.

While it may not be the most exciting technology sector for some, modern payment architecture is being shaped by these same forces. New mobile and desktop applications through banks and service providers make it possible to transfer money at the click of a button. And during the COVID-19 pandemic, the virtual exchange of money took on a greater purpose -- helping us avoid unnecessary in-person contact.

Payment innovation is an essential driver of digital transformation in banking and financial services. One of the latest developments with a potentially massive impact is the introduction of Request to Pay (RtP) services.

Request to Pay: What is it?

Request to Pay software places emphasis on communication and transactional efficiency for both payor and payee. According to Pay. UK’s official RtP website, the service is meant to overlay on top of existing payments infrastructure and can serve to help businesses and organizations handle bill payments, as well as settle bills between friends. The unique feature RtP brings to the table is allowing the payor to communicate with the payee even before the bill payment. The US and India have similar services, often called Request for Payment and UPI payments, all of which are changing the payments industry and placing an emphasis on interoperable payment systems. The Request to Pay ecosystem consists of three parts, the Biller portal (or the payee side), the central repository managed by accredited financial institutions and the payor app. It works on the principles of Open Banking, which means different financial institutions, billers, and payor apps on the RtP system can interoperate creating an open, flexible network that benefits all.

What does this mean for businesses?

This past year has been defined by change, due in no small part to the global impact of the COVID-19 pandemic. In the face of stay at home orders and social distancing guidelines, unprecedented emphasis was put on digital solutions that could empower newly remote workforces and help organizations strive to continue operating at full capacity. By adding a level of communication between payor and payee, Request to Pay provides full visibility into the audit trail and helps to avoid issues brought upon by a lack of communication during the process.

This offers a number of benefits for businesses. First, Request to Pay can speed up transactions - always a goal in today’s fast-paced world of instant gratification. It also provides greater visibility and transparency for all parties, offering insight into where bottlenecks are occurring, and helping to minimize errors in the process. For example the payee or the biller has better visibility on the payment behaviour of each payor, giving them a chance to send reminders to the later payors, provide a payment plan to those with financial shortfall, or offer rewards or incentives to those who always pay on time. For the payor too, it is possible to see all the invoices in one app making it easy to have more control over their finances.

Perhaps most importantly, Request to Pay offers potentially enormous cost savings. The time and effort businesses spend chasing down late payments, tracking a payment lost in the midst of the billing process, and sending follow-up statements isn’t often top of mind, but these costs can add up quickly. The communication enabled by RtP is designed to significantly reduce this spend.

Request to Pay will also help realize some of the potential benefits of other payments technologies, like electronic invoicing. Unlike the many “closed” networks that are currently unable (or unwilling, due to lack of incentive) to interface with other competing network, creating a siloed and disjointed payments infrastructure, RtP will allow everyone to exchange data and communicate - much like email users can send and receive emails from people using entirely separate email services. 

Why should you care about Request to Pay?

Adding touchpoints and communications to payments software takes greater advantage of the influx of connected devices to increase efficiency and provide better service to clients and customers. Request to Pay is one way that the payments ecosystem is adapting to new demand. It is an agnostic solution with use-cases spanning across industries such as utilities, government or federal businesses, insurance, telecom, and more.

RtP adds to the ever-increasing stable of software solutions that are updating and optimizing previously manual business processes through automation. In this case, providing instant payment requests, communication, and visibility of the process brings the speed and efficiency of payment processing to a new level. Digital transformation is taking place in all parts of business, and RtP is a great example of how it’s being done in the UK’s financial services industry.

Learn more about Exela’s Request to Pay solution.