Keeping listeners glued until the last moments of EBAday 2020 session ‘Request to Pay, what’s possible?’, moderator Leo Lipis, CEO, Lipis Advisors, challenged panellists with a particularly popular audience-submitted question: given that the very nature of Request to Pay outlines a shift in the economic balance for typical payments, from a market perspective, what is the actual business case for R2P?
Lipis first called on Chantal Fokke, product area lead at ING Bank to assess the question on everyone’s mind: “there are lots of cost drivers within the reconciliation process within companies and this product can absolutely introduce a lot of added value within the refund-reconciliation processes,” argues Fokke.
“If corporates can implement this well, the wholesale savings which can be achieved using R2P will make a significant difference.”
The question of the impact that Request to Pay will have on corporates themselves was a key theme visited multiple times throughout the session, particularly in terms of the challenge of ensuring that adoption is achieved across sectors beyond the well-understood peer-to-peer market.
Sandra Peute, business developer at SEPA explains that Tikkie in the Netherlands has seen rapid, positive R2P uptake in the peer-to-peer space, while in the business-to-consumer space, demand for R2P has skyrocketed with a surge in at home delivery thanks to the coronavirus.
Peute adds: “While these spaces have obvious potential for further growth and adoption in the near term, corporate update of R2P solutions will be a little more difficult given the level of integration needed.”
This integration, be it for example through the use of QR codes or embedded processes is vital if corporates wish to ride the R2P wave in the near future.
But how do we drive this adoption in reality?
Noting that there is always a question of cost, Lipis asks Christof Hofman, global head of payments and collection products, Deutsche Bank, to speak to the true value of Request to Pay in order to cement interest on the side of potential adoptees.
“It is user experience and it is the features it presents which makes R2P attractive. In Europe the two-factor authentication requirement means that mobiles with biometric capabilities can contextually embed this within the transaction process for a smooth experience. It’s seamless.”
Hofman adds: “ the fact that the consumer is given the option or feature of approving payment now, approving later, or deferring payment with embedded financing solutions makes it worthwhile for the consumer who can leverage their preferences.”
Though Pierre-Antoine Vacheron, CEO of Natixis Payments, agrees that “ it is a seamless experience for the user and the payer, R2P doesn’t currently offer charge-back comfort to the payer.
“Also, instant demand and credit transfers are also exposed to sanctions screening which is the case in card payments. This may create certain discrepancies in terms of transaction success and may cause challenges in some use-cases.”
Continuing on the question of risk, Peute adds that in addition to different screening processes, we are seeing new types of fraud emerge which, given the nature of R2P are not directly related to this payment method itself, namely reading the sending of fraudulent payment requests.
“We must take additional steps and put new fraud detection measures in place (on top of measures for existing payment methods) because these are new threats which are very difficult to detect.”
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