Request to Pay – a new standard for requesting a payment – is being built on top of existing payment infrastructure throughout Europe. With a patchwork of existing account-to-account solutions covering a wealth of different use cases, how will Request to Pay change the payments landscape?
In a recent Banking Circle webinar, Sarah Lauridsen, Head of Products and Solutions at Banking Circle, and Claus Richter, Chief Operating Officer at P27 Nordic Payments, shared their insights on the future of Request to Pay and its potential impact on the payments ecosystem.
The session was moderated by Esther Groen, an adviser to Holland FinTech and an Executive Board member of the European Women Payments Network.
You can watch the full webinar on demand here, or read on for our summary of the key takeaways from the event.
Why the buzz around Request to Pay?
“Every once in a while, there is a regulation or methodology that comes about that really has the potential to change the way we make and receive payments,” Sarah Lauridsen, Head of Products and Solutions at Banking Circle, said.
Currently, there are various iterations of account-to-account payment solutions in the market – most of which have their own shortcomings. Request to Pay has been designed to fit the missing pieces of the puzzle, and as a result, is likely to spark a lot of innovation in the payments area, Sarah went on to explain.
So how exactly does it work? Request to Pay is a messaging framework, which sits on top of and has been designed to complement existing payment infrastructure – ultimately creating the ability to easily request and complete real-time direct account-to-account payments. There are already a number of Request to Pay schemes across the global markets, including initiatives from PayUK and The European Payments Council.
“What all of these initiatives have in common is that they have been very thorough with the design – spending years in some cases – and in implementing a lot of best practices from modern product development,” Sarah explained. “The end result is a very versatile messaging scheme which will allow for quite a lot of innovation off the back of it.”
Who will drive success – and what are the obstacles?
While Request to Pay is tipped to have the potential to transform the payments landscape, it’s important to note that it is still early days in terms of its development and reach, said Claus Richter, Chief Operating Officer at P27 Nordic Payments.
The success and adoption levels of Request to Pay schemes will be largely dependent on whether the industry and regulators get behind the initiatives and give them enough of a push, according to Claus. In particular, banks will play a pivotal role in the transition and will need to lead when it comes to customer take-up.
Sarah echoed that sentiment, explaining that while Request to Pay schemes are open to a wide variety of providers, banks are likely to have the biggest impact on consumer adoption.
“For the vast majority of consumers, what I’d expect is to see them following the lead of their bank,” Sarah said. “When the banks make this available to their customers as more or less a built-in part of their digital services, that’s when you’ll see the traction and coverage.”
On top of the backing of the industry, both Sarah and Claus pointed to the number of positive use cases as a key driver in the success of Request to Pay – highlighting speed, operational cost savings and the customer experience as key benefits.
“When you look at this from the merchant or corporate perspective, harmonisation across markets will actually be a highly-efficient driver for them in their internal processing,” Claus added. “We will see in a number of areas that the use case is actually very efficient.”
To hear the speakers’ insights in full, you can watch the webinar on demand here.