The million-dollar payments question: ‘Request to Pay’ vs the rest of the ‘pays’

By Dean Wallace | 8 October 2018

A few weeks ago, I sat on a webinar panel discussing the concept of Request for Pay (RfP) and what the implications will be for the US market when it is made available as part of The Clearing House’s Real-Time Payments (RTP) network. I was joined by my esteemed partners Keith Gray from the Clearing House and George Evers from Vocalink, and at the end of the panel session we were asked, in the context of an ecommerce purchase, why anyone would want to use RfP instead of PayPal.

I took the question and talked about the fact that PayPal offers a great user experience, but not all merchants offer or like it, and many of them are likely to incentivize an RfP approach. I felt, and still feel, that this is the correct assessment.

But let’s look at the consumer experience with RfP in more depth. I said some would prefer the feeling of security using their trusted mobile bank app, and that would be enough. The potential for some merchant-provided incentive could also encourage the consumer, so doubly good. I then countered with a consideration that consumers are creatures of habit and so as they get more used to paying with their bank app, then RfP would become norm.

But what about their current habit of using PayPal? After all, PayPal is good. Right? This question stayed with me until the weekend. So, flash forward, on Saturday I had planned to take the kids swimming (a sometimes-tortuous family ritual I must admit), but a last-minute decision was made to go to the cinema (thanks to the British weather). So, mobile phone in hand, I selected the movie Ant-Man and Wasp (very funny btw), chose my seats and then was shown payment options of card, PayPal, Apple Pay or Google Pay. ‘No brainer - Apple Pay!’ was my decision (it would have been Google Pay if I was a droider). I selected my account, applied my thumb print, and paid. No typing, no errors, no fumbling, and a feeling of instant confirmation. A nice easy experience.

Suddenly it dawned on me. This was the answer to the panel question! I didn’t use PayPal because I wanted the simplicity of using my thumb print to sign instead of any typing on my phone. In the future, I may still choose Apple Pay as demonstrated above, but if I want to see my balance before making a payment (highly likely), then my mind would quickly move to using my bank’s app. And that’s where RfP comes in: I can see a balance before applying my thumbprint, or use my registered address if I needed delivery, or wanted to make sure I had the actual merchant’s name on the statement, rather than some back-office trading name I wouldn’t recognise on my statement, etc. Do this a few times, and I think many users will quickly form that new payment habit.

It’s going to be interesting to see the different use cases emerge as RfP continues to come to market across the world. Yes, there are hurdles to overcome and mass adoption won’t happen overnight.

Banks are starting to seriously look at the business case for Request for Payment (RfP) to improve customer service and client relationships, and reduce overall consumer debt management costs. A survey conducted during our webinar clearly revealed that there is a growing appetite to provide RfP even though more than half of the US banks surveyed felt that the value and volume for RfP would most likely come from their corporate customers rather than consumers. Even so, 7% said they were ready to go live imminently and 45% were exploring and finalizing their strategy to ensure a competitive advantage with all their customers.

The purpose of RfP has always been to address the need of payers to have more flexible payment options that complement payment methods such as direct debits. Businesses need to be able to easily and securely make a request for a payment for a product or service to their customers. Likewise, customers need to be able to have a complete, up to date and reliable view of bills they need to settle and choose how and when they are going to pay them to effectively manage their own short and long-term finances. Thus, there is a growing demand from both businesses and consumers that needs to be met by banks that ultimately hold the purse strings for the majority of current accounts. 

By having an Apple Pay-esque experience merged with the ability to better manage your finances, I am positive that we will be seeing more RfP digital payment experiences very soon in Europe, the US and the other markets that have made the move to Real-Time.

To listen to the webinar, click here

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