Real-time payments is a critical part of payments modernization. Request for Pay (RfP), is financial messaging scheme built on the rails of real-time payments, that enables billers to initiate real-time payments from bill payees with the click of a button. The request includes all relevant invoicing information, and the payee can pay immediately or at a scheduled time, giving them more control over when the funds are taken from their account. It’s a win-win—the biller benefits from irrevocable, good funds, and the payee gets more visibility and control over when the bill is paid. Here are five use cases for billers that are accelerating the adoption of RfP.
- “Risky Payments” or Pre-Collection/End of Service Payments - I am not talking about “Risky” in the Tom Cruise sliding across the floor kind of way, but risky in the sense of a WEB Debit ACH payment bouncing back on the biller for NSF or other reasons. The good funds model that RTP operates on means that the payment will only occur if the funds are in the account. This takes away the possibility of incurring a high fee for attempting to withdraw funds that may not be there. It also gives the bill payee the ability to pay the bill WHEN funds are in the account versus having to try to time the ACH delay. Also, the funds are irrevocable once transferred so billers get certainty of funds, which can allow them to continue to continue their services, or deliver goods to the payee.
- Payment Option for the “Just in time Bill Payer” - I will admit, I fall into this category from time to time (or all the time). I seldom pay bills before they are due, and try my best to keep my funds in my bank account for as long as possible, and I know I am not alone. With RfP, billers can provide me the ability to wait until the last second to pay, and receive those funds IMMEDIATELY. In today’s bill payment space, there can be anywhere from 1 to 3 days where my biller really doesn’t know: if I sent a check, paid via ACH from my online bank or from their bill payment site, or whether funds are actually in my account to pay the debit (which brings us back up to the first use case). RfP gives billers another option to help their clients pay, how they want to pay with when they want to pay.
- One-Off Bills/Invoices - For high value payments, the RfP rails gives billers the ability to send a one off bill or invoice to their consumer and business customers that can help accelerate their accounts receivable cycle. The message is delivered securely through the RTP network, directly to the payees bank account, where they can simply accept the charges and initiate the payment. By combining the eInvoice/Bill information to be sent on the payment network, the payee has everything in one place—no need to chase down the invoice PDF in an email, or try and locate a paper bill to manually enter details on a payment screen at the biller’s site or on their own consumer or business banking account. This use case will continue to grow in importance as the network’s limits continue to rise!
- Conversion of Non-auto/Recurring ACH payers - This use case is similar to our second use case, however I don’t necessarily think this group at their core are procrastinators—they just like to be in full control. For many, setting up bill payment for recurring or auto-pay is so they never have to think about the bill. I can raise my hand for plenty of those types of payments, the ones that are basically the same dollar amount every month and don’t put me at risk of an inadvertent overdraft on my checking account. However, for bills that may vary or come infrequently (maybe quarterly or bi-annually), there are plenty of payees that would prefer to validate the amount of the payment, and control when their payment leaves their hands. RfP gives these individuals the perfect tool to centralize their bills and give them even more control on when the payment leaves their account.
- Keeping Pace with a Changing Market - As my colleague mentioned in the Top RfP Test Cases, Use Cases, and Case Studies We’re Watching blog post, some of our markets largest banks and Billers are moving towards piloting RfP. As this new payment experience moves from niche to mass market, making sure your bank can support your ability to bill your clients and offer them the payment services they want is key. The payments market is transforming and consumer and business expectations won’t be far behind!
Read about some of the exciting RfP test cases that we’re watching right now in the market today in Top RfP Test Cases, Use Cases, and Case Studies We’re Watching.
Alacriti’s Cosmos for RTP® enables financial institutions and organizations to quickly and seamlessly connect to The Clearing House’s RTP® network without the burden of significant infrastructure overhauls or capital investments. To speak with an Alacriti real-time payments expert about RfP, please contact us at (908) 791-2916 or firstname.lastname@example.org.