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Treasury and Trade Solutions
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The Request to Pay Revolution
3
RTP BENEFITS
In the payments space there is the contest between physical
and digital instruments. Within digital payments there is
a battle for supremacy between payment instruments.
While credit card, debit card and electronic wallet based
payments are expected to grow strongly, RTP has a number
of benefits that could result in mass adoption.
1.
Reach
: RTP provides real time access to bank accounts,
reaching a larger population than cards or wallets. In
Asia, for example, 1.8 billion people have bank accounts
but not credit cards.
2.
Low cost
: RTP may result in a step change in merchant
costs, potentially moving to a model in which fees are
measured in ‘cents’ rather than ‘percents’. New RTP
providers may see payments as a data business rather
than a direct revenue opportunity.
3.
Risk and Controls
: RTP may reduce fraud and
chargebacks because the consumer authenticates
with their bank and approves each transaction. A
reduction in payment decline rates could improve
customer experience.
4.
Reconciliation
: information is captured along with the
payment transaction ensuring a perfect match between
payment and purchase. Rich information is facilitated
by adoption of ISO 20022 messaging standards.
5.
Real time settlement
: when RTP schemes are built on
real time payment rails, the merchant receives funds
instantly rather than waiting for two or more days.
6.
Tokenization
: a powerful feature of RTP in some
countries is that payments can be initiated through an
email address or phone number; i.e. banking details
are not obtained from the consumer. This makes
customer registration easier, may facilitate consumer
adoption, reduces merchant pain points with Payment
Card Industry Data Security Standards (PCI DSS) and
reduces the risk of personal data breaches.
7.
Reduction in late B2B payments
: businesses in many
countries suffer from late payments – an efficient RTP
process may help them get paid quicker and reduce
Days Sales Outstanding (DSO).
8.
Cashless (or ‘less cash’) society
: a real time
mechanism to debit bank accounts is a powerful
infrastructural capability with the potential to drive
further reductions in cash and cheque usage. RTP
protocols may also empower machine to machine
payments in the Internet of Things (IoT).
Ecommerce in Europe is booming!
Faced by competition from both
traditional brick-and-mortar
shops and global ecommerce
giants, it is crucial for European
online merchants to ensure that
the entire checkout process is
convenient and secure. If adopted
by all players in the payments
value-chain, RTP has the possibility
to be a game changer.”
Pascal König, Ecommerce Europe