The new messaging solution Request-to-Pay is one of the key topics that are discussed today by some European professionals in payments. This innovation, linked with e-invoicing and B2B digitalisation, is not yet a reality in all European countries, but many experts have already identified some key applications linked with the evolution of the market.
The SEPA RTP scheme, to be built by the European Payments Council (EPC), will certainly bring a new step in the European payments market, first of all, in the B2B context, where there is a strong potential in terms of the development of electronic payments. Thus, for example, some French corporate treasurers operating in the energy field, already see the Request-to-Pay as a key asset to reduce the payment delays. As well, in Germany, corporates and financial entities aim at digitalising invoicing and payments in the B2B context.
The major use cases explored in B2C and B2B contexts are: the possibility of creating an alternative to SEPA Direct Direct (SDD), the modernisation of payments for public administration, and the creation of a digital payment experience that consumers can appreciate for recurring payments or Buy Now, Pay Later (BNPL). Last but not least: the Request-to-Pay as a step towards totally digital payment, in combination with a credit transfer, for young generations enjoying digital, instant and mobility contexts.
The first use case linked with the creation of an alternative to SDD is mainly developed in countries where end-users don’t appreciate SDD payment because they want to be proactive in their transactions. In Portugal, where approximately 40% of consumers pay for electricity with SDD, the Request-to-Pay may be an interesting solution to offer a digital payment linked for instance with a SEPA Credit Transfer Inst (SCT Inst). The combination between Request-to-Pay and an instant payment is seen as a key marriage to foster electronic transactions in countries where traditional payments are often privileged. Above all, instant payments will become the ‘new normal’ in Europe, according to the purpose of the European Commission. Thus, it is important to keep in mind that the acceleration of the development of instant payment is one of the key goals of the European Commission for 2022.
In addition to this alternative to SDD payments, the other use case to be mentioned is the modernisation of payments towards public administration. Many European countries will be soon confronted with some regulations about digitalisation of payments tickets and/or invoices. For instance, in France, a legislation about digitalisation of invoices is planned for 2023. As a result, digital transactions will be a new deal in relations between end-users and companies and the Government has a strong role to play in this context. Request-to-Pay, combined with an instant payment or even a simple SEPA Credit Transfer, can be an interesting solution to transform traditional payments to public administration into modern transactions. It is the case not only for the payment of taxes, but also for the payment of penalties or other services linked with health or administration. In Italy, for instance, e-invoicing and more generally digitalisation of financial exchanges are a strong issue to foster security and commodity for the benefit of the national economy.
Another use case to be mentioned is the creation of an end-to-end digital payment experience to be appreciated by consumers for recurrent payments or BNPL. Thus, the combination between Request-to-Pay and an electronic payment will bring the opportunity to simplify these transactions. It is also important to mention that, according to some professionals, Request-to-Pay may be, in relation to an electronic payment, an interesting solution for young generations interested in new means of payment that are based on digital tools and mobility.
One of the questions may be ‘will Request-to-Pay replace some means of payment, like checks, for instance?’
Even if Request-to-Pay has all the qualities to foster the decline of checks in several European countries, in the B2B context, it’s clearly difficult to replace a tool with another in our ecosystem. The history of payments and the specificities of some European countries show us that it is the combination of various tools that bring opportunities to the market. The case of checks is a strong example: even if the European market has launched some interesting initiatives like SCT Inst for instant payment, checks are used in both B2B and B2C contexts in some countries like France.
Thus, the opportunity for Request-to-Pay is based on the capacity to give a digital alternative and to develop the quality of payments in our ecosystem. Some European countries already identified this innovation as a strong opportunity like Switzerland, where payments actor SIX Group already launched its Request-to-Pay solution eBill, or France, where the payments community already knows Sepamail Rubis that works as a national Request-to-Pay solution, or even Portugal, where payments actor SIBS launched a wallet called MBWay that allows a form of Request-to-Pay in a national context. That’s why many European actors wait for the normalisation of SEPA RTP scheme and the evolution of EPC rulebook as a major step to concretise their projects and ambitions in this field.
This article was first published in Payment Methods Report 2022, the most updated overview of trends and developments in the payment methods space and the innovative technologies that these methods work upon, emerging consumers habits, and strategies on how to win at conversion and retention.
About Andréa Toucinho
Expert in payments and innovative finance, Andréa Toucinho is Director of Studies, Prospective and Training of Partelya Consulting and Country Ambassador for France of European Women Payments Network (EWPN). France Representative of two national fintech associations – Aefi Spain and Afip Portugal – she published several editorials about payments.
About Partelya Consulting
Partelya Consulting is a French consulting company specialising in payments. Created in 2008, it works with all actors of the market, from banks to schemes and retailers, on technological, strategic and regulatory issues. The company is a member of the French Association du Paiement and contributes to several projects linked with payments and innovation.
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