Innovative payment solutions are continually emerging to enhance convenience, control, and efficiency. One such innovation gaining global traction is Request to Pay (RTP).  This article explores the intricacies of RTP, its operational mechanics, advantages, global adoption, and its transformative potential in the financial landscape.

What is Request to Pay (RTP)?

Request to Pay (RTP) is a secure messaging protocol that allows payees (such as individuals, businesses, or service providers) to send payment requests directly to payers through a digital channel. Unlike traditional payment methods that often follow rigid schedules (like bills or invoices requiring payment by a fixed due date), RTP introduces a dynamic, flexible approach where the payer is actively notified and can choose how and when to settle the amount.

Instead of sending a static invoice or waiting for a payer to initiate a transfer, RTP proactively engages the payer, offering options such as paying immediately, partially, requesting an extension, or declining the request.

How Does Request to Pay Work in Practice?

The RTP process is designed to be straightforward and user-friendly. It involves a series of simple, secure steps designed to facilitate seamless communication and payment execution:

1. Request Initiation

The payee creates a payment request detailing the amount owed, the reason for the request, the due date, and any relevant instructions. This request is sent via a secure communication channel—often integrated within banking apps, online platforms, or dedicated RTP applications.

2. Notification and Reception

The payer receives an alert through their preferred digital channel—such as their mobile banking app, email, or a dedicated RTP app. This notification includes all necessary payment details, presented clearly and transparently.

3. Response and Options

The payer reviews the request and has multiple options:

• Pay immediately (full or partial amount)
• Request an extension
• Decline the request
• Communicate with the payee regarding any discrepancies or issues

4. Payment Processing

Once the payer authorizes the payment, it is processed instantly through existing infrastructure—like Faster Payments (UK), SEPA Instant Credit Transfer (Europe), or other real-time payment schemes.

5. Confirmation and Reconciliation

Both receive confirmation that the transaction has been completed. Automated reconciliation reduces the need for manual administrative work, making payee efficiency better.

The Benefits of Request to Pay

RTP introduces numerous benefits tailored to the needs of modern digital economies. We can examine the advantages from both payer and payee perspectives.

Benefits for Payers:

• Enhanced Control and Flexibility: Payers can choose the timing and amount of payment, aligning payments with their cash flow and financial planning.
• Transparency and Communication: Direct messaging reduces ambiguity, allowing payers to clarify or dispute charges before payment.
• Partial Payments and Extensions: Options to pay in installments or request extension periods improve financial management, especially during liquidity constraints.
• Reduced Friction and Errors: Automated, secure messaging minimizes manual errors and delays associated with manual invoicing or payment instructions.

Benefits for Payees:

• Accelerated Cash Flow: Real-time notifications facilitate quicker payments, improving liquidity management.
• Cost Savings: Automated reconciliation and reduced administrative overhead lower billing and processing costs.
• Improved Customer Experience: Offering flexible, transparent payment options fosters stronger relationships and increases customer satisfaction.
• Enhanced Payment Certainty: The interactive nature of RTP reduces payment uncertainties and disputes.

Global Adoption

RTP is witnessing a growing adoption across various regions, each leveraging local payment infrastructures to implement tailored RTP solutions.

United Kingdom

Pay.UK launched its RTP framework in 2020, integrated within the UK’s Faster Payments Service, providing a versatile and secure platform for billers and consumers. The system supports various use cases, including bill payments, P2P transfers, and business transactions.

Europe

The European Payments Council introduced the SEPA Request to Pay scheme in 2020, enabling cross-border euro transactions across SEPA countries. It provides a messaging layer that facilitates the initiation of payment requests. The scheme aims to complement existing SEPA payment instruments by adding flexibility and efficiency to the payment process. This initiative promotes interoperability, enabling European consumers and businesses to send and receive RTP requests seamlessly.

Asia and Beyond

India’s UPI (Unified Payments Interface) incorporates a “Collect” feature—essentially a request to pay—enabling users to send payment requests via a smartphone app, widely used for peer-to-peer transactions. While the UPI ‘Collect’ feature allows users to send payment requests, the National Payments Corporation of India (NPCI) has announced plans to phase out this feature for merchant payments to curb fraud. Person-to-person ‘collect’ requests are now capped at INR 2,000 per day, with a push towards QR code-based transactions.

Türkiye

In 2024, the Central Bank of the Republic of Turkiye (TCMB) officially launched the FAST (Instant and Continuous Transfer of Funds) Request-to-Pay Overlay Service. This service allows payees to send payment requests to payers, facilitating instant payments and enhancing the efficiency of the Turkish payment ecosystem.

Practical Use Cases and Industry Applications of RTP

RTP’s versatility makes it suitable for various sectors:

Utility and Service Providers

Sending automatic payment requests for utility bills (electricity, water, gas), allowing consumers to choose how and when to settle.

E-commerce and Retail

Providing customers the ability to settle invoices via secure payment requests, improving checkout flexibility and reducing cart abandonment.

P2P and Social Payments

Facilitating peer-to-peer payments where friends or family can request funds, share expenses, or split bills conveniently.

B2B Transactions

Streamlining invoice management, enabling real-time payment requests and early settlement, leading to better cash flow management.

Healthcare

Hospitals and clinics can send patients payment requests aligned with insurance reimbursements or treatment costs, increasing collection efficiency.

The Future of Request to Pay

The development of RTP is revolutionizing digital financial transactions for the following reasons:

Integration Digital Wallets and Payment Platforms: As RTP is integrated into several fintech applications, its usage will be more intuitive and user-friendly.

Enhanced Data and Insights: Coupled with analytics, RTP can deliver insightful payment data, enabling better credit risk assessment and customer insights.

Interoperability and Global Standardization: As more regions adopt RTP, interoperability will facilitate cross-border, multi-currency transactions, fostering smoother international trade.

Regulatory Support: Governments and regulators are increasingly recognizing RTP’s role in improving payment security and financial inclusion, encouraging further adoption.

Challenges and Considerations

Despite its promise, implementing RTP involves overcoming certain hurdles:

Security and Privacy: Ensuring data protection and security against cyber threats is paramount.

Compatibility and Infrastructure Readiness: Organizations must upgrade payment systems and integrate RTP capabilities.

Adoption and Education: Customers and businesses need awareness and training to trust and utilize RTP effectively.

Conclusion

The Request to Pay feature represents something greater than an enhancement on payment capability; it represents the transition towards interactive, adaptive, and effective digital payments. With the payer gaining more control, payment processes made easier for payees, and real-time reconciliation facilitated, RTP is in perfect sync with evolving demands of modern economies. With the backing of international schemes, technological advances, and regulatory frameworks, RTP implementation is poised to be one of the pillars of future financial ecosystems. Whether for utilities, retail, P2P transfers, or B2B payments, embracing RTP empowers considerable operational benefits as well as clearer, more transparent, and more user-centric payment experiences.

Sertaç Eren, Senior Manager, Financial Messaging Development