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Mastercard (MA) Solution to Streamline Bill Payments In UK

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Zacks Equity Research
·5 min read
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Mastercard Incorporated MA recently rolled out an innovative application solution named Request to Pay in an effort to ease bill payments for consumers, businesses and financial organizations across the U.K.

The latest move highlights two facts, firstly, Mastercard becomes the first service provider to extend an end user application service within Pay.UK’s Request to Pay framework across the U.K. Notably, the framework was introduced by the one of the renowned retail payments authority of the country named Pay.UK in May 2020. Secondly, the Request to Pay solution can be referred to as both the first one approved by Pay.UK and also the one accredited for application and repository services.

Mastercard’s new solution generates end user applications, which may comprise a mobile app intended for consumers or a corporate IT system. Notably, the company’s Request to Pay end user application is anticipated to go live with its first partner from Spring of this year. Through these applications, billers and payers can build, send, take a look at and answer to ‘Requests to Pay’. The same solution is also equipped to create the reliable message storing and routing element known as message repositories.

The innovative solution will offer an array of alternate and flexible bill payment methods for payers, who can utilize them to settle payments ranging from mortgage repayments, utility and telecoms bills to council tax payments. The service also provides payers the option to make payments either fully or in part and if needed, have a talk with the biller requesting for more time to settle payments. Before making payments, the solution even allows payers to interact with their respective billers through an in-app chat feature to enquire regarding any bill element, which appears strange or has not been anticipated in advance. The solution is a time opportune one as the coronavirus induced financial insecurities have hampered the purchasing power of consumers nationwide.

For billers, the solution can be easily integrated into their existing processes. Upon its implementation, various financial institutions can provide an end user application. As a matter of fact, the application can be rolled out at reduced costs compared to a situation wherein these institutions had rolled out the solution themselves. Considering the constant pressure on financial institutions to launch innovative solutions, the Request to Pay solution is expected to strengthen the companies utilizing it, thereby driving customer engagement and bolstering revenue streams for the institutions.

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Moreover, the recent solution seems to address one of the issues which the U.K. has been grappling with as evident from 2020 State of Pay report by Mastercard. Per the report, bill payments often slip the minds of 10% of people across the U.K. as a result of which they make delayed payments. Also, 17% of them reported of not having command over outflows from their accounts. Mastercard intends to capitalize on the prevailing scenario by offering a streamlined bill payment experience for UK individuals and businesses with the recently launched solution. The company has also been striving to ease bill payments across the United States as evident from the launch of Mastercard Bill Pay Exchange, which is a mobile-first bill pay solution.

It is worth mentioning that the U.K. is a big market for Mastercard given the widespread usage of debit and credit cards for making payments across the country’s e-commerce market. Being the third largest e-commerce market in the world according to a J.P. Morgan report, the country has been witnessing rise in usage of digital wallets and bank transfers. The nation is in constant search of hassle-free alternative payment options for enhanced check out experiences. Also, elevated usage of mobile phones and increased internet penetration rate has been fueling growth of the U.K. payment market from much before the coronavirus outbreak.

Other companies such as Visa V had also conducted a successful Request to Pay pilot last year by making use of multiple payment initiation channels. PayPal PYPL has one of the most popular digital wallets in the U.K. Meanwhile, Amazon AMZN with a well-established marketplace in the country provides an enhanced online shopping experience.

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