New Research Shows Leading Global Banks Expect Request to Pay to Challenge Direct Debits and Payment Cards
18 January 2022 – A survey of leading global banks by Icon Solutions has revealed that Request to Pay is widely expected to challenge established payment methods, with 87% of respondents viewing it as a good alternative to direct debits and 71% expecting it will reduce merchant’s dependency on payment cards. Yet 67% also identify bank readiness as the main barrier impacting adoption of Request to Pay services, with the limitations of existing technology and a lack of clear strategy seen as the key inhibiting factors.
In allowing payees to initiate requests for payments within a secure messaging channel, Request to Pay enables new flexible ways for money to move between people, organisations and businesses. ‘Demystifying Request to Pay: An Industry Perspective’ surveys over 50 industry stakeholders, including global retail and corporate banks, to understand customer demand, key use-cases and the path to widespread adoption. In-depth interviews were also conducted with senior executives at several leading banks.
Despite early momentum from retail customers for bill payment services, 73% of respondents see most demand for Request to Pay services from large corporates. To reflect this increasing demand, respondents are planning to leverage Request to Pay to diversify product roadmaps, with invoicing, payments reconciliation, and the digitalisation and integration of processes and systems identified as the leading emerging use-cases.
Louise Shorthouse, Senior Payments Consultant at Icon, comments: “Make no mistake, the industry expects Request to Pay to have a lasting impact on the future of banking and payments. The potential to deliver more flexibility, choice and control to corporates, merchants and consumers – while reducing costs – offers a real alternative. For example, Request to Pay opens the ability to circumvent traditional card rails and drive consumers towards cheaper account-to-account (A2A) based payment options at the point-of-sale, and provides an alternative to direct debits that gives customers more flexibility in how they pay bills and manage their finances. If we consider the massive transaction volumes involved, it seems inevitable that Request to Pay will change the way we pay.”
Yet despite increasing customer demand and growing uptake of instant payments presenting a compelling business case, a gap persists between industry attitude and actions. Few survey respondents had launched Request to Pay services to date and Request to Pay does not feature on the short-term roadmaps for many. While countering the risk of fraud and standardising message content and exchange are seen as key challenges, bank readiness is overwhelmingly seen as the main barrier to adoption.
Toine van Beusekom, Strategy Director at Icon explains: “Despite the undoubted potential of Request to Pay, technology transformation programmes remain notoriously difficult. Identifying a pragmatic path to upgrade existing technology estates, in tandem with a clear strategy that is aligned with broader business objectives, will be critical to accelerating bank support for Request to Pay services and remaining competitive in the long-term. But with banks already at the limits of their technological and strategic capacity, trusted third-parties promise to play an important role in filling the resource gap to help banks realise the huge opportunities presented by Request to Pay.”
To learn more, download the full report.