In 2020, the UK’s national retail payments operator, Pay.UK, created Request to Pay – a new framework to enable a more flexible, secure and customer-focused way for bills to be settled between people, organisations and businesses.
The aim of Request to Pay is to provide billers, like telecoms providers, with a messaging service that integrates into an existing payments infrastructure. Rather than sending an invoice via email or post, billers can message their customer through existing services like a banking app, to request a payment. Customers can then pay in full, pay in part or discuss and agree more time to settle their bills.
Through this service, billers can reduce time and costs in chasing payments and settling disputes, and in the process offer customers a better level of service. Indeed, it is estimated that Request to Pay could help save the UK economy between £2 and £3 billion each year.
Mastercard was the first to market with its Request to Pay solution in April 2021, providing billers and billing service providers with the technical infrastructure to send and receive Request to Pay messages.
Telecoms Tech News spoke with James Bushby, Senior Vice President of Strategic Sales and Real-Time Payments, ahead of potential upcoming Request to Pay UK pilots to learn more about how it could help billers in the telecoms sector.
Telecoms Tech: What is your role at Mastercard?
James Bushby: I’m the Senior Vice President of Strategic Sales and Real-time Payments at Mastercard. As part of this role I have responsibility for Mastercard’s core account to account UK business relationships, which includes real-time payments, ATM managed services, and bill payment innovation.
TT: Could you introduce the concept of Request to Pay for any who are unfamiliar with it?
JB: Request to Pay is a UK bill payment solution with framework developed by Pay.UK, which serves as the central retail payments authority in the UK. They run payment solutions such as Faster Payments, which allows for real-time transfers between bank accounts, and Bacs, which covers direct debit and benefit payments.
Request to Pay is a secure messaging service which allows a biller to request a payment from a payer and for them to reconcile this within this service. Unlike a direct debit, where that money is pulled out the account, this is pushing a payment and asking the customer to meet it.
TT: How does Mastercard fit into Request to Pay’s framework?
JB: Mastercard is trying to help markets across the world to digitise bill payments and assist in digital bill presentment. Our modernisation of the bill payment process began in the US, where the offering is called Mastercard Bill Pay Exchange, and we currently manage 45 million electronic bill payments a month for more than 155,000 billers there. We’re now starting to pilot in other markets, and the UK is a high priority for us.
We recently ran a number of consumer surveys and interviews in the UK, revealing that consumers view bill payment and the quality of communication with billers as a major point of dissatisfaction. Over a third of the consumers find it complicated to resolve issues around payments with their biller. Over 40% note that the lack of meaningful communication with their biller is a problem when they raise questions or disputes.
With regards to Mastercard’s role within the UK Request to Pay service, we are focused on providing the central repository that securely stores and routes the messages sent between the billers and their customers.
TT: How does Request to Pay help bill payers?
JB: I think more so than anything Request to Pay gives consumers increased flexibility with how they pay their bills. When that request from the biller is sent through to the end user, they can either make full payment, make a partial payment, or they can start a dialogue with the biller to say if they disagree with the bill, to ask for more information, or to say they can’t meet the payment. What’s more, because the biller’s verified payment information is included within the Request to Pay message and the payer needs to agree to receive the request in their trusted application, it will really help reduce the risk of accidental payment misdirection and push payment fraud.
Finally, for customers who fall into arrears, Request to Pay offers a more secure, efficient, and flexible means of communicating than over a phone call or text.
TT: And what benefits can Request to Pay offer billers?
JB: By giving the customer more options, billers get earlier sight of the payer’s intentions. This not only delivers a better customer experience but also means billers can manage their arrears more effectively. You’ve also got the benefit of having access to a lot more information surrounding any given interaction with a customer.
Through integration with the CRM system, telcos can use this information to help frame their communication strategies with customers. By having a better understanding of who pays when and how they do it, providers can more effectively manage each segment of their customer base.
The solution also gives businesses better transparency over cash flow and drives operational efficiencies through greater automation and digitisation of the bill presentment and collection process.
Request to Pay establishes a secure and trusted eco-system between the consumer and the biller. We see great value for telcos using this to reduce the risk of accidental payment misdirection and push payment fraud by ensuring a standard and secure two-way bill related communication.
Finally, as a new principle in the market, early adopters of Request to Pay can differentiate themselves from other telco players and reap the rewards in terms of new customer acquisition and retention.
TT: Where does Mastercard expect consumer demand for Request to Pay to come from?
JB: This solution is going to really help anyone who struggles to meet payments. More than four in ten (44%) people in Mastercard research said their financial situation worsened in the last year, forcing them to miss multiple bills, and 72% of billers say bill disputes have gone up in the past year.
Bill payers who are paid on an irregular basis will also benefit from Request to Pay. For example, in the gig-worker economy, where people don’t earn a typical monthly salary, Request to Pay allows them to have a dialogue with their biller and manage payments more effectively.
I also think that Covid has brought a lot of people who were once put off by digital payments on board. Even my 77-year-old dad is now comfortable using digital methods to pay and communicate with people and businesses. So the expectations around how bill payments are made these days has developed and people want more flexibility.
TT: When is it coming to market?
JB: Our next step is to have a pilot and the key focus of that will be education. Recently, I’ve been presenting at conferences to help those on the biller side better understand the principles of Request to Pay. We plan to have a pilot up and running within the first half of 2022 with a number of large, well-known billers. Of those billers, the telecoms vertical is one we see as critical, and we are already engaged with a number of providers.
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