Collecting payments in today’s world is an administrative and operational headache, with impacts across the functional areas. Take a utilities company for example… Their revenue is generated when customers proactively pay their bills. But, what happens when a customer forgets to pay their bill, when a direct debit goes wrong, or when a customer does not have the funds to pay?

These scenarios require Operations teams to reach out to their customers, who can not always secure payment (immediately or at all). Treasury and Finance teams must do the same, as they can only provide forecasts based on predictions. A solid communication channel between the two areas is therefore essential. However, even if well-implemented, the verbal transition of the messaging from Operations to Treasury will inevitably dilute the underlying potential for data. In times of unpredictable and unprecedented financial stress, these same Operational teams are over capacity to chase customers. Meanwhile, corporate treasurers fight to balance their liquidity positions to combat the unpredicted amount of unpaid debts.

Request to Pay will help businesses by minimising the operational headaches that typically accompany bill-paying (and chasing!) processes.

Now, imagine if there were a mechanism which facilitated communication with the customer via their core banking provider; a way to see their ability (or willingness) to pay their bills. This could secure improved insights into never-before-seen cash flow and bad debt data.

The wait could finally be over…

Request to Pay, an up-and-coming payments phenomena, will facilitate an innovative way for you, the business, to request payments from your customers. Forget sending bills and invoices or managing clunky direct debits. In the UK, this initiative has been launched by PayUK, with Mastercard as its first enroller; it enables you to request payments from your customers via a simple and secure messaging framework. This will seamlessly put you in contact with your customers, via their bank, and ultimately give them three options; 1) Pay right away (in part or in full); 2) Let you know they need more time or; 3) Decline to pay, initiating a dialogue with your customer support team.

The benefits to the consumer in this transaction are clear, and in line with the consumer-first trend that has emerged in the payments landscape over the past decade; reduced friction, enhanced flexibility and effectively improved control over their finances. However, the knock-on benefits of this framework do not stop at the consumer. Request to Pay will help businesses by minimising the operational headaches that typically accompany bill-paying (and chasing!) processes. It will also provide internal Treasury functions with a rich and valuable data set with which to better understand their cash flows.

Treasurers, say hello to a wealth of new and improved cash flow data

Never before have corporate Treasurers had such a valuable data set around their cash flows and customers’ bad debt. Request to Pay, by nature of its real-time communication offering, will provide Treasurers with enhanced visibility of their outstanding payments. It will also provide a data set which facilitates more accurate financial reporting on their liquidity position in any given moment.

Take a household energy provider. Before, they would have to make assumptions in order to inform their cash flow and liquidity reporting, accounting for the estimated amount of bad debts they might eventually have to write off. Today, Treasurers can understand their liquidity and financial positions in a more accurate and informed manner. All this, whilst also generating a more behavioural view of their data, providing potential behavioural modelling benefits in the future.

In today’s financial landscape, access to bad-debt data and forecasting tools are particularly valuable for the modern-day service provider. As global economic crisis such as COVID-19 occur, corporate Treasurers will likely scramble to predict their expected bad debt. Previously acceptable assumptions will be rendered invalid, thanks to expectedly higher, but more unpredictable, numbers of consumers becoming unable to pay their bills.

Request to Pay will help remediate this, providing Treasuries with real-time insights into their bad debt, and ‘doubtful debt’. This open, seamless communication channel between service providers and consumers will also encourage transparency around a consumer’s financial position. Data will be real time and eliminate the added burden of an operational task force manually contacting customers one-by-one. This will have a knock-on effect on any Treasurer’s ability to understand their business’ financial position, and conduct accurate and informed forecasting; this is significant in the current environment, where liquidity reporting is more critical than ever.

So, what do you need to do?

Large-scale businesses can expect to follow in Mastercard’s footsteps (or leverage Mastercard’s own solution as a white label service) in the near future as the Request to Pay scheme starts to onboard customers. In the meantime, your business should be proactive; take the opportunity to begin exploring the benefits of Request to Pay. You should start to embed the framework within existing infrastructure where possible, now.

In the meantime, your business should be proactive; take the opportunity to begin exploring the benefits of Request to Pay.

This technology should drive change within your Operating Model, fundamentally changing the way your Contact Centres communicate with your customers when it comes to paying bills. Where before, your customer service agents might have utilised a reactive model, you should explore and leverage the benefits of shifting to proactive communication, pre-empting the chances of bad debt. As continued economic uncertainty looms, Treasurers and Operational Leads alike will be ready and thankful for this seamless technology. An enhanced data set which allows you to accurately understand your forecasted cash flow in real time will only make your business more robust.

Are you coming from a purely data-driven and business health standpoint? Or, perhaps you’re looking to provide best-in-class customer experience across financial products? Either or both, Request to Pay is here to stay.