A banking scheme that lets you verify and dispute payments before any cash is transferred from your account is slowly being rolled out in the UK.
Request to Pay is a new messaging service that companies can use to help settle bills and other payments.
The service gives customers the ability to communicate directly with their biller - whether it is an organisation or an individual - using an in-app chat feature.
It means they can query an unusual or unexpected bill before the payment is made, or make alternative payment arrangements.
Once approved, the service then turns the payment request into a credit transfer.
Request to Pay also lets the payer settle their bill in full, in part, request additional time or decline the payment altogether.
The final framework for how it would work was launched in May 2020, with Visa completing a trial of its services at the time.
In April this year, Mastercard became the first in the UK to launch its Request to Pay application service through Pay.UK.
We explain what you need to know about Request to Pay after a joint survey of European companies by the Euro Banking Association (EBA) and PPI AG confirmed there is interest in rolling it out to more firms.
Companies from 20 countries responded to the detailed questionnaire between September 2020 and February 2021.
What is Request to Pay?
Request to Pay is designed to work in the same way as a messaging service.
According to the Pay.UK website, payers will be able to “manage and settle their bills more flexibly” while billers will benefit from being able to send requests for payments more efficiently.
“Billers and payers can engage in a digital dialogue to support bill payments,” the website continues.
Another pros for billers is that they’ll get unique reference data and a digital audit trail that can streamline the process of their bill.
According to Pay.UK, most types of bills could be managed efficiently with Request to Pay.
This would include utility bills, charitable donations, retail payments or payments between individuals.
What are your thoughts on Request to Pay? Let us know in the comments
But it denies that giving customers flexibility will encourage people to put off paying, and says “contractual agreements will remain in place and failure to meet deadlines will result in the same consequences”.
This means if you decline a payment, you could still see your services cut off or risk your bill being transferred to a debt agency.
To use Request to Pay, technical service providers, payment service providers, banking institutions, fintechs and billers must be signed up to the service.
You will need to sign up using one of the organisations that offer the service.
Once you have signed up and connected your bank account, you will be able to send requests, using your provider and method of choice.
How is it different to direct debits?
A direct debit is an arrangement made with a bank that allows a third party to transfer money from a person's account on agreed dates.
Request to Pay is different in that it is described as an “entirely open” service, as both the biller and payer can speak directly to each other.
It also claims to be more flexible, due to allowing people to decide how much they can pay, as long as agreed by the company.
On the Pay.UK website, it says: “Request to Pay is not a replacement for Direct Debit, but a complementary service tailored to a large proportion of the UK population which do not benefit from using Direct Debit today.
“These consumers and businesses often require greater flexibility in making and receiving payments.”
Request to Pay is also different to faster payments in that it will be up to the provider to determine what payments its customers are able to use.
However, it will be a requirement of the service that more than one payment option is offered.
