Request-to-Pay: Everything you need to know about this new European standard

What is Request-to-Pay?

Literally “request for payment” in French, SEPA Request-to-Pay contributes to the dematerialization of payment-related exchanges and processes. This new pan-European standard (ISO 20022) primarily aims to simplify the management of invoice payments issued by companies.

Concretely, RTP is a banking messaging service that allows a creditor to send a payment request to their debtor, including the amount, the invoice reference, and proposing one or more payment deadlines (immediate, upon validation of the RTP request, or after a due date).

Request-to-Pay is not directly linked to a payment method; the request is independent of the method. Rather, it is an initiator service that complements the SEPA Credit Transfer (SCT) breakpoints and accelerates the exchange of data in a transparent manner.

RTP is mainly dedicated to electronic invoice payment and debt collection. It also plays a key role in the widespread adoption of instant payment solutions by end consumers.

How does the R2P service work?

The Request-to-Pay process is established to facilitate monetary exchanges between creditors and debtors. The creditor sends a payment request via an RTP message to the payer, who must then validate or reject the transaction in their banking account.

Step-by-step flow of the payment process:

1. Sale of a good or service (online/offline) between a creditor (beneficiary) and a debtor (payer), which results in the issuance of an invoice.
2. Sharing of information. The creditor provides the information necessary to create the RTP message (amount, invoice reference, validity date, payment deadline, etc.) and sends it to the debtor.
3. Sending a notification. The debtor receives a notification informing them of the pending invoice payment request.
4. Verification of the payer’s creditworthiness and connection via a secure area. The payer identifies themselves to their bank to validate or reject the transaction.
5. Validation/Rejection of the collection request. If the payer authorizes the payment, the creditor receives confirmation of acceptance. The debtor undertakes to pay the invoice by a given date.
6. Transmission of payment. If the debtor pays by SEPA credit transfer from his bank, the beneficiary recovers the associated invoice references in his transaction.

Monitoring the Lifecycle of an Electronic Invoice

From the issuance of the R2P request to payment collection, the electronic invoice processing is viewable by the seller, the buyer, and the tax authorities.

The RTP system improves transaction reconciliation. RTP includes the reference of the traditional or electronic invoice in the body of its message, which facilitates bank reconciliation and accounting.

Indeed, the French Directorate General of Public Finance (DGFiP) has defined various statuses to facilitate the tracking of electronic invoices throughout their lifecycle:

• Submitted: The invoice or credit note has been issued by a supplier on an invoicing portal or a digitalization platform.
• Issued by the supplier platform: The invoice is processed and ready to be issued to the customer.
• Received by the client platform: The invoice is received by the buyer’s platform or bank, but not yet displayed to the payer.
• Available: The payer receives a notification and has access to the invoice and the RTP request.
• Accepted: The payer accepts the invoice.
• Approved: The invoice is fully processed by the buyer.
• Partially Approved: The buyer partially processes the invoice, which may result in the issuance of a credit note.
• In Dispute: The buyer and seller disagree. The invoice may need to be corrected to receive buyer approval.
• Suspended: The buyer lacks supporting documentation to validate and pay the invoice.
• Completed: An attachment or comment has been added to the pending request.
• Declined: The invoice is rejected by the buyer.
• Rejected: The platform rejects the invoice issued by the supplier for technical reasons.
• Payment Transmitted: The payment transfer has been sent to the supplier.
• Collected: The supplier has received payment and proof of payment.

Four of these statuses have been made mandatory by the DGFiP: invoice submitted, refused, rejected, and collected.

What added value for merchants?

In 2019, nearly 80% of European business payments were made via bank transfers¹. However, this is difficult to include in a 100% digital payment process. And that’s a problem today.

With the reform of generalized electronic invoicing for businesses, the French government is pursuing its policy of accelerating the digital transition. Businesses subject to VAT must therefore adapt in order to be able to issue and receive digital invoices, by 2024.

This new legislation is a real opportunity for the development of services such as SEPA Request-to-Pay. This is part of a drive to digitalize exchanges and improve the traceability of cash receipts. It can be integrated with a dematerialized invoicing solution, and is complementary to the usual payment methods used by professionals (SEPA transfers and direct debits).

5 benefits of Request-to-Pay

With the implementation of the Request-to-Pay messaging service, transactions are completed transparently, in real time, and with great flexibility.

Simplified invoicing and invoice tracking

With SEPA Request-to-Pay, the invoice lifecycle is tracked directly. The standardized payment request includes the invoice number and matches it to the creditor’s IBAN.

For businesses, tracking sent requests can be easily integrated into existing accounting systems. This enables automated invoice and payment tracking, for optimized financial and accounting management.

Accelerated transactions

By allowing businesses to send payment requests directly to customers, R2P significantly simplifies the invoice payment process. Customers receive real-time payment notifications and can respond to these requests before paying with their preferred payment method.

This feature eliminates the manual entry of payment details, reducing errors and accelerating the payment process. Ultimately, this translates into shorter payment times and increased cash flow for businesses.

Ease of payment

With the RTP system, payers benefit from unprecedented payment flexibility. They can choose to pay immediately, schedule it for a later date, or even negotiate payment terms with the invoice issuer, subject, of course, to the general terms and conditions of sale and individual needs.

Improving the customer experience

Beyond payment flexibility, Request-to-Pay offers a more pleasant experience for the connected consumer.

Reduction in transaction costs

SEPA transfers initiated by R2P benefit from very competitive pricing.

Which CentralPay payment request solution?

With Smart Collection you benefit from a high-performance system, including numerous payment services, which can be integrated into your electronic invoice solution.

You control your customers’ payment paths by creating lettered payment links for each of your invoices, and CentralPay automates the sending and reminder of invoices by email or SMS. Your customers pay online using their preferred payment method (bank card, SEPA transfer, SEPA direct debit, initiated payment). The payment link ensures seamless traceability, automatically reconciling all incoming funds to your account, even transfers with no references or incorrect amounts.

As an Electronic Money Institution, CentralPay supports corporate financial services in setting up digitalized payment processes, designed to facilitate their management of invoice payments and debt collection.

¹ Observatoire de la sécurité des moyens de paiement, Banque de France (rapport annuel de 2020)