With the payments industry constantly in flux, many businesses keep having to update their payment processing strategies. The latest major change occurred in 2020, when the pandemic led to the rise of digital and contactless payment models. Within two years, the number of online banking users worldwide jumped to over 2 billion and continues to rise.

The Request for Payment (RFP) is the newest iteration of this formula. Here’s all you need to know about this process, why your business should use it, and how to do it efficiently.

What Is a Request for Payment (RFP)?

An RFP is a formal document that businesses use to request payment for their products or services. It includes essential details like the due date, payment amount, and so on. The purpose of an RFP is to help businesses avoid confusion and get paid on time. Understanding the RFP process can be a key factor in managing payments effectively.

The RFP process involves four simple steps:

• Business sends the RFP to the customer
• Business notifies the customer
• Customer reviews RFP details
• Customer submits payment

Benefits of Using Request for Payments

The main benefit of using RFPs is the speed of the process. By initiating the payment and giving the customer an option to complete the purchase instantly, you can save a lot of time. RFPs can also be automated, so you don’t have to create every request manually. It’s possible to send automated requests at regular intervals, which is perfect for recurring payments.

Versatility is another big plus when it comes to RFPs. Creating and sending RFPs can be done in many different ways, making it easy to find an option that works for both you and your customers. This builds trust and improves your chances of getting paid promptly.

Finally, RFPs allow you to control the payment process. They help you manage your cash flow, track the status of your payments, and make more informed strategy decisions.

Best Practices for Creating Effective RFPs

Your key goal with sending RFPs should be to reduce friction as much as possible. The RFP process should have as few steps as possible. Ideally, your customer would only scan a QR code or click the payment link to get to the checkout page. If their details are already stored there, they should be able to finish the transaction with a single tap.

To further increase the odds of your customers completing a transaction, offer a variety of payment methods. This is particularly important if you’re doing business overseas, as those clients may have local preferred payment options.

Aim to automate as much of the process as you can. Payment service providers and invoice processing software both offer ways to instantly generate and send RFPs. You can also automate payment reminders, reducing manual intervention to the bare minimum.