DECEMBER - 20208Request- to-Pay is the Next Generation of Payments and BankingBy James Dickerson, Client Partner, Motive Labs, Motive partnersIt is no coincidence that payments,the most compet-itive area of banking and financial services, is also the ripest for disruption. The record levels of corpo-rate and venture capital flowing into the payments sector are impacting all spheres of banking, from retail and commercial to investment and emerging neo-banks. As these new payment capabilities evolve, banks will either experience increasing disintermediation or will grasp the opportunity to innovate and reinvent the relationship with their customers. Request-to-pay (RTP), one of the hottest topics in payments and already a popular service offered by many fintechs, is primed to usher in a new wave of payments innovation for both consumers and businesses alike. Built as a message layer that sits on top of existing banking and payments rails, RTP provides a flexible way for consumers and businesses to settle bills, instantaneously and transparently. Here's how it works: A consumer or business decides to purchase a good or service. A request-to-pay message with details of the purchase is then sent by the seller to the purchaser. Once the purchaser authenticates and approves the transaction, and once the merchant receives assurance the payment is on the way, the goods or services can be released, and the purchaser's bank sends the payment to the seller's bank through a clearing system in real time. RTP's potential upsides are myriadRTP brings a number of potential benefits to consumers, businesses, and merchants, as well as positive knock-on effects for the financial services sector and the global economy.For consumers, RTP is a simple way for friends and family to exchange funds conveniently, in real time. It is primed for easy integration with social media and chat channels, meaning it will likely be highly desirable and adopted by millennials. RTP makes fulfilling invoices as simple as opening a link, which allows every communication channel to serve as a potential medium for payments. RTP is also designed for flexible payments schedules, giving consumers more options for how they settle invoices. For example, a consumer will be able to settle half of an invoice immediately, and the other half at a later date, depending on their personal cash flow, MY OPINIONIN
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