What is SEPA request to pay?

SEPA Request-to-Pay (SRTP) has changed the European payments market, offering businesses a seamless and dynamic way to request payments within the SEPA region. As this new, innovative payment framework gains momentum, it’s important to understand how and why your business should consider leveraging SRTP.

Below, we explain how SEPA Request-to-Pay works, demonstrating how it can help your business reduce costs, bolster security, and improve the customer experience.

What is SEPA request-to-pay?

SEPA Request-to-Pay (SRTP) was established by the European Payments Council (EPC), introducing a frictionless and immediate payment framework that enables European businesses to request payments, whether physical or online, from customers for up to 100,000 euros.

Request-to-pay is already a widely-adopted concept globally, with peer-to-peer platforms – such as Venmo and India's Unified Payment Interface (UPI) – using different versions of it. SRTP specifically aims to establish a standardized model for request-to-pay specifically within the EU, aiming to encourage businesses to implement it on a broader scale.

SRTP doesn’t function as a payment method or a payment instrument – rather, it serves as a way to initiate a payment request. It prioritizes digital-first, data-rich SEPA payments where the focus is on the interaction or user experience rather than just the transaction itself.

How does SEPA Request-to-Pay work?

SRTP isn’t a way to make payments, but rather a tool for sending messages that ask someone to start a payment using SMS, WhatsApp, or email. With SRTP, you can ask customers to pay you instead of waiting for them to do it, making the payment process quicker and easier. It fits in between a business transaction and the actual payment, helping the whole digital payment process move along smoothly. This system is designed to be open to certain groups that aren't officially regulated, like e-invoicing services and commerce platforms.

The SEPA Request-to-Pay scheme involves four main players: the person receiving the payment (payee), their SRTP service provider, the person making the payment (payer), and the payer's SRTP service provider.

The payee, like an online seller, can use information provided by the buyer – such as their name, account details, price, and item – to create a payment request, called a "Request-to-Pay," following SRTP rules. The payee's SRTP provider helps convert this data and sends it to the payer's SRTP provider.

The payer then gets the Request-to-Pay on their device within seconds. How this message is received – like via email, mobile notification, or WhatsApp – depends on security measures and agreements between the payer and their SRTP provider. SRTP rules don't specify the communication method or channel.

The payer then decides whether to accept or decline the Request-to-Pay. In the future, requests for partial payments or installment payments may be possible, but they're not included in the current rulebook version. The payee can also suggest how the payment should be made, like through a standard SEPA bank transfer or a faster SEPA Instant Transfer.

If the payer declines, the payee gets an instant notification. If the payer accepts, they can initiate the payment – like through online banking – without having to enter the amount, payee's account details, or any invoice number. However, the actual payment process isn’t part of the SRTP scheme but ideally works in tandem with it.

Learn more: What is a request for payments

Benefits for merchants for accepting SEPA Request-to-Pay

Embracing SEPA Request-to-Pay offers a variety of benefits for your business, including:

• Improved security: SRTP instant payments prioritize security, providing a robust framework that safeguards transactions and sensitive information.

• More flexibility: SRTP gives your business the flexibility to choose how to make or receive payments, which caters to varying customer preferences and needs.

• Seamless cross-border transactions: SRTP facilitates hassle-free cross-border payments, breaking down geographical barriers and expanding business reach internationally.

• Real-time, around-the-clock transaction processing: With SRTP, payments are processed in real-time, ensuring that transactions are quickly completed regardless of the time or day, improving overall efficiency.

• Instant access to funds: When completing a transaction, the funds become immediately available, which can be crucial if your business relies on a steady cash flow.

• Suitable for different business models: SRTP offers the convenience of requesting payments both in-store and online, accommodating different business models and sales channels.

• Cost-effective: If banks offer competitive pricing, SRTP has the potential to be a more cost-effective and secure payment option for your business compared to others.

• Easier reconciliation: With standardized and structured remittance information with each transaction, you should find it easier to reconcile payments.

The future of SEPA Request-to-Pay

Overall, the interaction between payer and payee is separate from the payment process, which could lead to fewer potential hiccups for the payer and a wider range of service providers, including fintech companies. 

And because the user experience is similar to open banking payments (also known as payment initiation), SRTP should operate on many of these same banking platforms. However, the specifics will vary depending on the particular use case and service provider. This is due to the high level of adaptability in what can be built on SRTP, since the user experience is not tied directly to the transaction.

Details like how the request is made or sent, as well as how the end-user verifies the transaction, will be entirely determined by the service provider. The EPC assures that the SRTP framework will be widely accessible, with messages processed almost in real-time, around the clock.

Entities from all SEPA countries can take part, as long as they follow the fair competition rule between payment service providers (PSPs) and non PSPs. It’s expected that the SEPA Request-to-Pay scheme will develop and offer more advanced features in the future. Also, to ensure the scheme's operational strength and resilience, all participants must undergo a validation process before joining.

Implement SEPA payments with Checkout.com

With Checkout.com, you can start accepting SEPA payment methods and get quick, easy and cost-effective direct debits across 36 European countries. SEPA facilitates over 20 billion transactions a year, and we can help you tap into this market. 

SEPA Request-to-Pay is a fresh and evolving concept in the world of payments, and it's important to note that the specifics and how it's put into action might differ depending on the country and the specific bank you're dealing with. However, if you're seeking seamless and secure payment solutions, we're here to help you find the perfect fit for your specific needs.

Talk to our sales team for more information on how Checkout.com can help your business flourish within the SEPA region.