A week after saying they were less than a year away from testing a real-time payments network in the U.S., The Clearing House and FIS have submitted a proposal about the system to the Federal Reserve's Faster Payments Task Force.
The federal task force, a key sounding board for the Fed's ongoing faster payments initiative, will evaluate the companies' Real-Time Payments system proposal.
The Clearing House, an operator of the Automated Clearing House network, has been working on its system in conjunction with other efforts that the Fed is monitoring. FIS will help the system achieve ubiquity by offering the enhanced payments services to more than 3,000 financial institutions.
“The Clearing House is implementing a foundational clearing and settlement system whose core attributes will enable financial institutions to develop innovative new products for their customers.” Jim Aramanda, CEO of The Clearing House, said in an April 25 press release.
“We know that if our system meets the needs of customers in terms of innovative services, speed, efficiency, and security there is no reason it won’t also align with the task force’s criteria,” Aramanda added.
The Fed's task force is identifying and assessing approaches for implementing safe, ubiquitous, faster payments capabilities in the U.S.
The Clearing House said it designed its system to meet or exceed the 36 elements of an effective payments network that the Fed committee established in the past year.
In addition to FIS, The Clearing House has also partnered with Jack Henry and Associates and D+H. Collectively, these three partnerships will enable the system to reach more than 10,000 U.S. financial institutions.
The Clearing House said its system will not be constrained by the limits of legacy payment networks because it has been designed for flexibility to adapt to changing technology and customer needs.
Some of those needs include supply chain management, just-in-time bill paying, immediate paychecks, customer service refunds, insurance claim reimbursements and informal service payments such as babysitting and lawn care.
The Clearing House is a banking association and payments company that is owned by the largest commercial banks and dates back to 1853.
It clears and settles nearly $2 trillion in U.S. dollar payments each day, representing half of all commercial ACH and wire volume, the company said.