What is Request-to-Pay (RTP) and How Does It Work?

Payment systems around the world are undergoing changes. With the growth of digital payments and new user needs, we are all looking for more flexible and transparent software solutions. Along with open banking, another solution is a new and fast-growing payment channel called Request-to-Pay (RTP). What are its benefits, how does it work, and how you can benefit from it? You can find answers to these and other questions in this article.

What is Request To Pay and how does it work?

Before getting into the details of how Request-to-Pay can make a difference, let’s look at what RTP is and how it works.

Request-to-Pay (RTP or R2P) is a payment channel that allows payers and payees to exchange data in real-time. The term is primarily used within the UK, but the concept is also gaining widespread acceptance in other regions. For example, in Europe it is called Request 2 Pay (R2P), and in the USA you can find Request for Payment.

Basically, RTP is a highly secure messaging service through which a biller can initiate a digital payment request from the payer. The payer receives this request on their mobile device, usually in a banking app or a third-party fintech app, and can choose from several options: pay in full, pay only a part, ask for an extension, decline, or ask for information. If the payment is confirmed, the money is automatically transferred to the recipient’s account in real-time. Thus, all participants of the payment flow receive more flexibility and communication opportunities regarding payments.

RTP is closely related to open banking since it forms the necessary open ecosystem for the Request-to-Pay process. With Request-to-Pay, open banking billers can allow their payment service providers (PSPs) to instantly and irrevocably make and receive payments directly between their accounts and their customers’ accounts. All this empowers users with the advantages of instant payments and an open financial ecosystem.

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