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Is Request to Pay the System for a World of New Norms

This the latest research from Finextra and Exela Technologies by our man, Matt Tarpey

It’s clear that the COVID-19 pandemic will likely have a lasting impact on many things, from the way we travel to the popularity of remote work arrangements and contactless delivery options. Add to that list the way individuals and small businesses make and request payments. As this new white paper from Finextra and Exela discusses, the economic crisis brought about by the pandemic will create a situation where both payers and payees will benefit from Request to Pay (RtP), a more agile solution to settling invoices and debts.

Request-to-Pay removes some of the friction related to sending and receiving payments and increases cash liquidity - a crucial benefit for the post-coronavirus world. 


Influx of Gig Workers

One of the biggest groups RtP stands to benefit is the newly-unemployed. The closures, temporary or permanent, of businesses across the world led to a massive wave of layoffs and furloughs. According to Fortune, 44.2 million people filed for unemployment services in the U.S. during the coronavirus pandemic, as of mid June. This spike will likely lead many who previously held full-time positions to turn to freelance or gig work as a source of income.

With a less stable income, many of these workers are likely to opt out of direct debit bill payments, as they may not be able to guarantee that their accounts will contain the necessary funds when the bills come due. But with RtP, they get a direct line of communication with the payment requestor, as well as the ability to renegotiate and submit partial payment, allowing them to retain more control over their obligations and payments.

Lenders Pulled in Two Directions

As more people are faced with the looming or present threat of financial instability, many will turn to banks for support. This will naturally cause lenders to want to tighten their lending criteria in order to protect their assets and invest wisely. However, at the same time, due to the nature of the crisis leading to the rise in financial instability, banks and other financial institutions may face political pressure to take on more risk to help support families and small businesses.

In some cases, utility companies facing similar pressures have sought flexible tools that would allow people to slip into shortfall without taking a sizable credit hit. Financial institutions may want to adopt similar practices in order to assist their customers through these unprecedented times.

Request to Pay can mitigate some of the risks associated with lending by combining an instant payment function with an easy communications channel where parties can enter into a dialogue 

to discuss and potentially update terms of payment. This not only reduces some of the costs associated with chasing down payments, but also limits the need to involve third parties like debt collection agencies.

In many cases, it’s in the lender’s benefit to allow some flexibility in payment. Many customers may only need a few extra days. RtP makes it easy to formally agree to this type of modification, allowing lenders to avoid a lengthy and expensive arrears process and instead receive payment, albeit a little later. 

This type of flexibility is made possible by the speed at which RtP delivers funds - that is, instantly. The ability to send and receive payments instantly creates greater liquidity, making it less risky to negotiate bills and invoices.


As Covid-19’s impact continues to reshape our economy, cash flow will be top of mind for small Faced with unexpected job losses, millions of consumers may enter the gig economy, forcing them to adapt to a life with less consistent income and less financial security. Financial institutions and lenders will face pressure from governments to resist the natural inclination to tighten lending criteria in order to provide support to families and small businesses as they deal with the financial fallout of Covid-19. Innovation like RtP can help dampen that blow and smooth the transition.

New products that harness real-time payments and Open Banking are uniquely suited to thrive in this new normal. Such innovation is often stifled by apathy or inertia, but the current crisis has invigorated businesses to actively seek out paradigm-shifting solutions like RtP. As the world emerges from the Covid-19 pandemic to discover a new normal, easier, more flexible payment options may be one way it changes for the better.



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Ron Cogburn

Ron Cogburn


Exela Technologies

Member since

12 Apr 2016



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