he Coronavirus pandemic has brought financial challenges in liquidity for businesses and an increased demand for flexible digital payment methods. Is Request-to-Pay (RtP) to become the new normal when making a payment?
BACs approved software suppliers or BACs bureaux can help businesses with their Direct Debit collections. Direct Debits themselves are a great payment method that can be low friction for the business as they’re relatively low cost and low maintenance. However there are big (and growing) sections of the population that can’t or won’t pay by Direct Debit meaning that billers have to provide alternative means for bill payment. This usually means cards, cash or *gulp* cheques.
These alternatives operate quite differently from one another and are often quite difficult to support which means that not all BACs suppliers will choose to support them. Whilst potentially a cost saving it also means a loss of additional revenue (only 55% of utility bills are paid using DD) but also a strategic risk as the biller will be engaging directly with alternative payment service providers for non DD payments.
RtP plugs this gap as it covers everything but DD! It is the missing messaging layer that allows a conscious decoupling of the payment from the invoicing. The payment then is managed by the payer in their chosen application. The biller gets a response back once the payment has been made and can then reconcile. All of this orchestrated by the BACs accredited company supported by Answer Pay.
But that’s not all. Another major area of business for BACs related organisations is payroll management. One of the major recent innovations in this area is the advent of advance salary schemes where employees can draw down on their monthly salary for any days/hours they’ve worked already. Building an infrastructure to facilitate this is a big job hence why we see so many companies specialise purely in this area.
Could RtP help advance salary payments too? Given we have a ready made messaging ecosystem connecting companies and consumers, potentially yes. You could see the reverse message flow of the typical RtP where a consumer would play the role of “biller” and would request payment from their company. The company could then choose to pay the request in full, part pay it, or request a delay (perhaps the employee needs to work more hours to fulfill payout criteria).
You then have a single solution which could potentially address both inbound and outbound payments for a business and complements existing BACs payment solutions. It becomes clear as to why there is such interest from the BACs community.
Answer Pay is here to help. We have created the UK’s first certified RtP repository and are working with partners to take the service to market. It can be fully white labelled so you have the control and flexibility of building your own solution with the convenience of buying it instead. Not only that as it has already been certified there is a much shorter lead time to market. Reach out to hear more!