The Request to Pay Revolution

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Treasury and Trade Solutions | The Request to Pay Revolution 1
A NEWWAY TO PAY
While cryptocurrency and blockchain garner most of the
headlines, a quiet revolution in payments is gathering
momentum: the emergence of real time Request to Pay
(RTP) collections from bank accounts. The subject of real time
payments has been written about extensively – this article
focuses on lesser known developments in real time collections.
The RTP revolution is about regulators creating open
digital markets, merchants reducing the friction and cost
of collections, fintechs building new services on top of
banking rails and financial institutions figuring out how to
maintain the customer relationship. There is a paradigm
shift underway as banking systems and processes migrate
from batch to real time processing.
This article describes what is happening, but more
importantly what the changes may mean for regulators,
merchants, marketplaces, fintechs and banks. It is also a
call to action, because RTP schemes will fall flat if they fail
to meet the detailed needs of payment system users. Citi’s
goal is to enable progress of RTP as an efficient digital
method of payment by highlighting critical success factors
and sharing best practices from around the world.
HOW RTP WORKS
RTP is a collective term for schemes that trigger payments
from bank accounts. In contrast with Direct Debits, RTPs
are real time and suitable for single or ad hoc payments.
They do not require a static upfront mandate from the
payer and are not subject to extended rights of revocation.
RTP may also be thought of as an upgrade of Electronic
Bill Presentment & Payment (EBPP), enabling the payer to
approve and execute the requested payment in real time.
RTP schemes work in broadly similar ways. This is the high
level process for a Consumer to Business (C2B) RTP:
1. Checkout: A consumer shops on a merchant’s website
and chooses to pay through their bank.
2. RTP initiation: The merchant initiates an RTP to the
consumer’s bank, sending details of the purchase.
3. Authentication: The consumer authenticates with their
bank through a web or mobile channel.
4. Approval: The consumer is presented with details of
the payment then approves the transaction.
5. Confirmation: The merchant receives assurance from
the payer’s bank that the payment is on the way,
enabling the release of goods or services.
6. Payment: The consumer’s bank sends the payment to
the merchant’s bank through a clearing system, ideally
in real time.
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“Providing a seamless experience
is key to us at and
that is especially true when it
comes to facilitating payments
for our customers.
We are very interested in the
global possibilities of RTP, as well
as other payment technology
innovations, and are always
interested in exploring new ways
to empower consumers with their
online purchases.”
Oliver Bisserier, CFO at