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After a relatively quiet year in the news, Request To Pay (RTP) is once again making headlines as two leading payments firms announce new plans for the overlay messaging service.
RTP is a messaging service, independent and complimentary to the payment message, which enables businesses and organisations to request payments rather than simply send an invoice. Pay.UK launched the UK framework in May 2020, whereas the EU rulebook, the single euro payments area RTP (SRTP) scheme, was launched in November of the same year and is being overseen by the European Payments Council.
Last week, Visa and Swiss-based payments infrastructure provider SIX both announced new partnerships to roll out RTP options.
Visa launches UK RTP pilot
On December 7, the card network confirmed that it is working with partners, including digital billing specialist Revive Management and Crisis, a UK-based charity for people experiencing homelessness, to launch a pilot RTP service.
The aim is to bring together some of the UK’s leading utility, retail, financial services, telecoms companies and charities.
“Request to pay has the potential to encourage one of the biggest shifts in how UK consumers pay for their utilities, mobile phone contracts or streaming services in recent times,” the company said in a statement to VIXIO.
The solution also enables financial inclusion by giving consumers more flexibility and simple, transparent money management capabilities, the spokesperson continued. “These benefits are especially important at a time when increasing numbers of people are employed in the gig economy or earning irregular incomes.”
Although there are a number of UK RTP solutions in planning from different providers, Visa played a significant role in the UK’s development of an RTP proof of concept, having been part of the first RTP message sent and received using Pay.UK standards in 2019.
“Visa’s participation in request to pay services is a natural extension of its existing role as a global and open payments network,” the spokesperson said, pointing out that RTP methods change the way that parties involved in a payment arrangement interact; therefore, enabling consumers to choose the payment method they use to settle their bills. “It allows payers and payees to communicate directly through the payment platform and gives the payer flexibility over how their payment is made, within the options offered by the payee.”
A particular focus of Visa’s decision appears to be the social benefits that RTP brings.
Financial pressures can be a big factor that can force people into homelessness, said Richard Lee, fundraising director at Crisis.
“This pilot offers a great opportunity for consumers to manage their bills in a simple way and try to reduce some of this pressure,” he said while pointing out that for people who are in a position to do so, the pilot will help to manage any donations to charity that they may be considering.
According to data from UK Finance, 85 percent of regular payments for bills and other household commitments are currently done using direct debit. For most people, this is a relatively painless process. For consumers, it takes the stress out of paying bills, while for billers it ensures a controlled and regular stream of income while lowering costs of chasing arrears. It is also a very low-cost solution.
However, one of the big issues for many vulnerable customers or those without a good credit rating is gaining access to direct debits, as it requires a level of financial standing. For consumers who do not qualify for direct debits (or do not like them), alternatives can either be expensive or time-consuming.
RTP represents an ideal and convenient alternative with which to pay bills.
SIX to pilot European-wide RTP service
SIX, meanwhile, told stakeholders in a post on LinkedIn that it is working with financial consultancy BearingPoint to create a new platform for digital bills and RTP in Europe.
The Zurich-based banking giant told the German press this week that it sees “considerable growth” for an RTP system in Europe. "RTP offers the institutes the opportunity to secure and expand the payment business," said Dieter Goerdten, head of products and solutions for SIX.
These two partnerships come just a week after the new SEPA RTP (SRTP) rulebook was published. Changes to the SRTP scheme rulebook include enhanced functionalities, such as the possibility to populate a URL, the currency agnosticism principle and the request for payment guarantee.
According to Thomas Steiner, BearingPoint’s global banking lead, the future looks bright for RTP.
“In the short term, R2P will be still a challenger method", he told VIXIO, meaning it will need convince many users to switch from their current payment habits, "but in the longer term and against the background of increasing digitisation R2P, it has the chance to dominate at least in account-to-account payments.”
Moreover, it is yet to be determined just how RTP will develop across Europe.
“The most beneficial use case might vary among the regions due to local market peculiarities,” he speculated.
For the German market, for example, the use case of combined e-invoicing and payment initiation is the most attractive one, Steiner said.
