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WHAT THE "REQUEST TO PAY" TREND MEANS FOR FINANCIAL INSTITUTIONS

What the “request to pay” trend means for financial institutions

Payment systems all over the world are changing. We are all looking for more flexible and transparent software solutions as digital payments and user needs grow.

Aside from open banking, another solution is a new and rapidly growing payment channel known as the request to pay (RTP). What are its advantages, how does it function, and how can you benefit from it?

In this post, SmartOSC Fintech will show you what the “request to pay” trend means for your financial institutions.

What is the Request To Pay?

Request To Pay (RTP) is a highly secure messaging service that allows a biller to request a digital payment from a payer. The payer receives this request on their mobile device, usually through a banking app or a third-party fintech app, and has several options, including paying in full, paying in part, requesting an extension, declining, or requesting information.

The funds are transferred to the recipient’s account in real time if the payment is approved. As a result, all participants in the payment flow benefit from increased payment flexibility and communication opportunities.

Benefits of Request To Pay

WHAT THE "REQUEST TO PAY" TREND MEANS FOR FINANCIAL INSTITUTIONS

Faster and more convenient payments

While credit card payments can take several days to process, RTP payments are almost instantaneous. Invoice resolution is facilitated by direct real-time communication between the payer and the biller.

RTP ensures a smoother reconciliation process in this manner. Electronic invoicing and the ability to pay with a few mouse clicks is a huge benefit for all parties involved in the payment process.

Improved security

Request to Pay is a very safe payment method. The biller does not even need the payer’s payment information to send a request. The request is routed to the proxy payment address of the payer. Payers also have complete control over whether to accept or reject the payment, and funds cannot be withdrawn from their accounts without their permission.

Furthermore, payers accept payment requests through their trusted financial institution or payment app, eliminating the need for third-party platforms.

Reduced costs

WHAT THE "REQUEST TO PAY" TREND MEANS FOR FINANCIAL INSTITUTIONS

Request to Pay enables cost-cutting opportunities for both the payer and the payee. The payer will be able to avoid late fees by requesting more time, and transactions will be carried out directly from their account to the beneficiary’s account with lower fees.

As a result of using digital invoicing, businesses will be able to improve debt management and reduce the time and effort required to track late payments. The savings are significant on a company scale with hundreds of customers.

Increased customer loyalty

Finally, with Request to Pay, financial institutions provide an additional payment option to their customers, thereby improving the customer experience. RTP increases visibility and communication for end users and businesses. It is a more customer-centric approach aimed at increasing customer trust and loyalty.

Conclusion

The request to pay trend is growing fast, and for good reason. This payment channel is quick, easy, and secure. Financial institutions that want to stay ahead of the curve should start offering this payment method to their customers. Are you ready to offer your customers the convenience of request-to-pay? Contact SmartOSC Fintech today to learn more about how we can help get you started.

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