Why Request-to-Pay Will Replace Neither Credit Cards nor Invoice Payments!

The payment request known as Request-to-Pay (RTP) is expected to positively transform digital payments and e-commerce. But can it really do that? 

How Request-to-Pay Works

At its core, Request-to-Pay is a standardised digital payment request valid throughout the SEPA area, based on European standards and described in a rulebook published by the European Payments Council (EPC). This message contains all transaction-related information and—provided the customer confirms it—triggers a bank transfer. So it is neither a new payment method, as is sometimes incorrectly claimed, nor the associated payment instrument (such as a debit card), but simply a standardised notification protocol. 

In practice, the customer enters their details at checkout, after which the payee sends a request to the customer including additional information such as the payment deadline or invoice reference. This request can be delivered, for example, by email, directly to a banking app (via push notification), or through messaging services such as WhatsApp or Telegram. 

The customer then has the option to reject the Request-to-Pay, accept it and pay immediately, or choose to pay at a later time. Unlike cash or mobile payment transactions, the transaction is not initiated instantly but can be postponed. 

If the customer accepts the payment request, they are free to choose whether to use, for example, a regular SEPA credit transfer or a SEPA instant credit transfer via online banking. The SEPA rulebook therefore does not prescribe any specific payment method. The payee is informed about the status—for example, receiving a notification that the buyer has accepted the request. 

Request-to-Pay is highly versatile and offers numerous use cases. These include invoicing and invoice payment, recurring payments, and the collection of debts or outstanding taxes. It is therefore particularly well suited for subscriptions, installment payments, and reservations, such as in hotels or with airlines. Peer-to-peer transfers and e-commerce purchases can also benefit from this method. In addition, Request-to-Pay enables options such as “buy now, pay later” and can also be used for in-store payments via QR codes. 

Request-to-Pay Offers Numerous Advantages

Request-to-Pay therefore opens up many opportunities for merchants and customers, automating processing for both sides to a large extent. First of all, merchants can automatically reconcile incoming payments, something every accounting department will appreciate. In combination with instant payments or “Buy Now, Pay Later,” RTP allows merchants to offer customers a convenient way to initiate payments directly and, above all, easily from their bank account. 

Another advantage: merchants face a lower risk of payment failure. Unlike a SEPA direct debit, Request-to-Pay triggers a transfer initiated independently by the customer—the payment is therefore binding and cannot be reversed. The risk of a chargeback after 8 weeks or 13 months is therefore eliminated. As a result, RTP makes it possible to handle business cases that would otherwise usually require additional costs or involve more risk. 

Request-to-Pay also offers new ways to collect receivables, as the new system makes it possible to design customized repayment options as part of receivables management. Missed payments can be reminded easily via RTP or converted into an affordable installment model. 

For consumers, Request-to-Pay is above all very secure, simple, and highly transparent. Thanks to the attached information, all payment requests can be clearly identified and provide a better overview of personal finances, as there is no need to reconcile current account statements, PayPal accounts, and credit card bills. In addition, consumers authorise payments with a single click and thus retain full control over their spending. Open payment requests and upcoming deadlines can be easily viewed in the app, and completed payments are posted directly to the customer’s own bank account. 

And when it comes to security: because every payment with Request-to-Pay is actively triggered with a click, the risk of manipulation is reduced. Payment requests that appear suspicious can also simply be rejected. 

Can RTP Gain Traction?

Aside from these aspects, however, the question remains: can the system gain traction? The answer depends on consumer demand and the widespread availability of Request-to-Pay. And here we are dealing with a classic chicken-and-egg problem. RTP certainly holds significant potential for businesses in general and merchants in particular, but from the consumer perspective there are already good alternatives. 

With credit cards, wallets, or “Buy Now, Pay Later,” end customers can also shop securely, conveniently, and flexibly. In particular, payments via Apple Pay or Google Pay currently lead the way in terms of user-friendliness and simplicity. Demand for a new payment option is therefore likely to remain limited, especially if the customer’s own account is debited directly. 

Which brings us to the second point: availability. As mentioned, RTP is not new, and the SEPA rulebook has also existed for almost four years. Nevertheless, so far only a few banks offer SEPA Request-to-Pay, not least because they would need to adapt their own banking apps accordingly, which involves a certain amount of effort. There is therefore also a lack of broad market availability, which in turn is likely to reduce visibility and thus end-customer demand. 

Request-to-Pay Gets a Boost from the EU Regulation on Instant Payments

Since April 2024, Request-to-Pay is likely to receive new momentum, as this was when the new Instant Payments Regulation entered into force. This regulation obliges banks to create all necessary prerequisites for instant payments in the euro area within the next 18 months. By January 2025, all banks and payment service providers must be able to receive instant payments from their customers. A further nine months later, in October 2025, all banks in the eurozone must offer their customers the possibility to send instant payments. 

This is likely to provide enough momentum for the missing puzzle piece, Request-to-Pay. In combination with instant credit transfers, it can significantly accelerate many processes, whether directly at the point of sale, in e-commerce, or in invoicing. Merchants would then benefit from immediate transaction processing and receipt of funds and could dispatch goods immediately and without risk, such as the possibility of a chargeback. 

Considered together, instant payments and Request-to-Pay could become a new standard in the EU and become firmly established. The possibilities for automation in invoice processing are immense. However, they will not displace traditional payment methods: credit cards and “Buy Now, Pay Later” simply have their advantages and will remain with us for many years to come. 

About the Author:

Timo Seifert is Director Product Management in the Payments division at Unzer. In this role, he ensures that merchants can offer their customers all common national and international payment methods, both online and offline regardless of currency and without major effort. He is also responsible for the overall product development and integration of new payment methods.