Request-to-Pay (RTP) is a payment service that allows a payer to receive a request for payment from a payee, which they can either approve, decline, or ask for more time. Unlike traditional payment methods, RTP gives users more control over when and how they pay. This system is designed to simplify the payment process, reduce friction, and improve cash flow for both businesses and individuals.

For example, a business might send a payment request to a customer after providing a service. The customer can then review the request, ensure everything is correct, and decide when to pay. This eliminates the need for invoices, reminders, or follow-up emails, making the process more efficient.

 

How Does Request-to-Pay Work?

In RTP, the payee sends a payment request, which contains all the necessary information such as the amount and due date. The payer can choose to approve the payment, schedule it for later, or request additional time.

Payments through RTP can be processed as quickly as 20 seconds, making it ideal for businesses that handle high-volume transactions. This allows for real-time control and ensures that both parties have full transparency throughout the payment process.

 

Key Benefits of Request-to-Pay

1. Flexibility for the Payer:
RTP gives payers the flexibility to choose when and how they pay. This reduces the chances of missed payments and allows better control over cash flow.

2. Efficiency for the Payee:
For businesses, RTP simplifies the payment process and speeds up cash collection. This reduces the delays caused by traditional invoicing methods.

3. Cost Savings:
Companies can save up to €6.90 per transaction by using RTP-enabled e-invoicing and payment reconciliation (according to Partelya Consulting’s Request-to-Pay study), rather than paper-based processes. This significantly reduces operational costs for businesses.

4. Real-Time Payment Processing:
With RTP, transactions can be completed in real-time, providing faster payment processing and reducing the likelihood of late payments. This is a key benefit for both payers and payees, particularly in industries where speed is essential.

5. Regulatory Support:
The European Commission is pushing for RTP adoption across Europe. By 2024, all Payment Service Providers (PSPs) in the EU must support RTP as part of broader efforts to modernize payments.

 

Request-to-Pay vs. Traditional Payment Methods

Traditional payment methods often require the payer to initiate the transaction, whether through bank transfers, credit cards, or checks. This can lead to delays, errors, or missed payments. In contrast, RTP shifts the responsibility to the payee to initiate the request, creating a more efficient and streamlined process. Here’s a quick comparison:

  • Traditional Payments: The payer initiates the transaction, often after receiving an invoice.
  • Request-to-Pay: The payee sends a payment request, and the payer responds with a decision to approve, decline, or postpone.

 

Key Players in the Request-to-Pay Space

As RTP grows in popularity, several companies are leading the charge in providing this service globally:

Europe :

APAC :

These key players are helping businesses and individuals adopt RTP solutions, offering more flexible and secure ways to manage payments.

RTP in Europe: WERO (EPI) and Future Projects

WERO, also known as the European Payments Initiative (EPI), is set to integrate RTP into its unified payment solution. This initiative aims to reduce Europe’s reliance on international card schemes and modernize the payment landscape. The combination of RTP and instant payments within WERO will be key to providing flexibility for both B2B and B2C markets. EPI’s future project also aligns with efforts by the European Payments Council (EPC) to standardize RTP through the SEPA Request-to-Pay (SRTP) framework, ensuring interoperability across borders.

The Future of Request-to-Pay

As digital and automated payment systems grow, Request-to-Pay will play an increasingly important role in the financial ecosystem. RTP gives payers more control over their payments and helps payees collect money faster and more reliably. This system is set to revolutionize how payments happen.

One of the major drivers of RTP’s growth is the rise of open banking. Open banking allows financial institutions to share data with authorized third parties through secure APIs, enabling real-time transactions and communication. RTP fits perfectly within this framework, offering businesses and consumers more transparency and control.

Experts predict that RTP will see widespread adoption across industries such as utilities, retail, and telecommunications, where invoicing and payment collection can often be slow and cumbersome. As more companies embrace digital transformation, RTP will become a key tool for managing payments more efficiently.

This trend is expected to spread across Europe, with the RTP adoption potential in C2M and B2C markets reaching 56%. Businesses that adopt RTP now will have an advantage in streamlining payments and reducing operational costs.

 

Conclusion: Why Request-to-Pay Matters

Request-to-Pay is an innovative solution that provides a flexible, secure, and efficient way to handle payments. It benefits both payers and payees by streamlining the payment process and offering more transparency and control. With major companies like GoCardless, TrueLayer, and PayPal leading the charge, RTP is set to become a game-changer in the payments industry.

As businesses continue to adopt digital payment solutions, RTP will play an essential role in ensuring that payments are handled quickly, securely, and flexibly. Whether you’re a business looking to improve cash flow or a consumer seeking more control over your payments, RTP is a solution worth exploring.

 

 

Don’t Confuse RTP with RTP!

Yes, you read that right—RTP can mean two completely different things in the world of payments! 😅 On one hand, we have Request-to-Pay (RTP), which lets someone request a payment. On the other hand, there’s Real-Time Payments (RTP), which refers to instant transfers between bank accounts.

Same acronym, very different meanings. If you want to dive deeper into Real-Time Payments, check out our blog post on Account-to-Account Payments to clear things up. Because in the world of payments, not all RTPs are created equal! 😉

 

 

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