What is a payment reference?
By Mariana Almeida Marques
The payment reference is a simple, yet important term to be aware of. Every time we transfer money or pay bills, we will encounter an option to add a payment reference. Adding the right reference will make your life easier and save the company you are paying to a lot of trouble.
What does payment reference mean?
Payment reference is a message to the payee so that they can easily identify the payer or purpose of the transaction. When paying a friend, for instance, a payer may want to add a message containing the purpose of this transaction, whether that be “restaurant bill”, “cinema tickets”, or whatever the transaction is for.
When paying a bill to a company, however, payment references are highly important and can’t be disregarded. This is because most companies use this reference to more easily identify their customers and connect the payments they receive to the correspondent customer account. Certain companies may ask you to add your customer reference number in the payment reference, your full name, or any other number used to identify you. You can save the payment reference and use it for other transactions, or change it any time you want.
Payment reference number
Usually, you can find your payment reference number in invoice letters, bills or through your online account portal. If you are unsure of what number you need to add as your reference, it is worth calling the company you are paying to and asking for clarification.
When paying your rent, for instance, it is common to add your post code and flat number rather than a customer number, as this reference helps agents recognise you better. Payment references have a limit of 18 characters, so you wouldn’t be able to add your full address or full name in this section. Contact the company you are paying to if your customer number is longer than 18 characters, as you will have to find another way to pay.
What happens if I submit the wrong payment reference?
Submitting the wrong payment reference won’t cause you any major problem, and you won’t have to pay again because of that. Companies can still see the account number and sort code that relate to the transaction. However, it does time a fair amount of work for companies to match your bank details with your customer account, as they have endless lists of customer accounts to go through.
In fact, it is estimated that UK companies lose millions of pounds each year on trying to match the payments with their correspondent customer accounts. If you spot a mistake in your payment reference after you submitted the payment, notify the company you are paying to as soon as possible.
Imburse offers connectivity to the entire payments ecosystem. By connecting to Imburse, companies can access any payment provider and technology they want, and quickly integrate it into their existing IT systems. Our platform offers companies the flexibility to easily expand to new markets and reach different customer bases, whilst continuing to exceed customers’ expectations. If you would like to know more about Imburse or request a free demo, reach out to our team below.