Connecting real-time payments to old-time technology

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Seeing a need for virtual and legacy payments worlds to better connect, Push Payments and partner linked2pay developed a real-time payments system that can function as that connective tissue.

In essentially converting ACH and paper check processes into instant digital payments, the companies say they are addressing cash flow problems for businesses and merchants and allowing banks to implement real-time payments through an application interface without requiring a complete makeover of legacy systems.

"They just have to plug in and do the same thing they are doing now, but just getting better 'energy'," said Travis Dulaney, CEO of Push Payments.

Push Payments and linked2pay have worked together since late last year, with Push Payments providing the real-time payments technology and linked2pay providing the "onramp" by handling the registration process for businesses and merchants wanting the upgrade.

The system enables merchants to send a day's or week's card receipts to their bank for instant payment into merchant accounts.

"The impact of a real-time payment is not only a major step in removing friction for merchants in the funding of their card receipts, but also in enabling them to take a more agile approach in running their businesses," said Richard McShirley, chief marketing officer for linked2pay. "Getting paid for card receipts in one second after closing up for the day — that's the ultimate in speeding up cash flow."

This hybrid model is currently finding favor with online companies sending reimbursements, insurance companies paying out claims, stock brokerages making payments and transferring funds, and employers using it for payroll or commission payouts.

"It's all about instant funding for these types of companies," Dulaney said. "On the merchant side, it's about empowering that channel because we built a high-volume transactional process that is very fast and secure."

Push Payments would not disclose its current customer list, saying only that many top fintech and corporate businesses are currently clients or partners. In the coming weeks, it plans to announce new partners and has plans to address requests from independent sales organizations regarding sales and distribution, Dulaney added.

In its role as a faster payments provider, Dulaney said Push Payments has had a table at most of the faster payments meetings taking place with the Federal Reserve.

"Clearly, moving cash is what it is all about, and banks make a lot of money by holding onto cash, but to compete in today's world they have to stay abreast of innovation," said Russ Schoper, industry analyst at Atlanta, Ga.-based Business Development International Inc. "Real-time payments is important, and there isn't a business out there in the world that wouldn't want to be paid faster."

The funding process at Push Payments and linked2pay is "about as fast as you can get it," Schoper added. "Cash flow is the critical component, so there should be just a huge appeal there. But the banks, they love that float and still like to hold onto money as long as they can."

Obviously, risk assessment comes into play for current payment processes. Many transactions don't clear for at least a few days as security measures scrutinize the payments and banks authorize clearance.

"When faster payments first came out, people were worried that if we were too fast, we couldn't catch fraud," Dulaney said. "That's not right. You actually catch fraud faster."

Linked2pay has a key role in that process, adding its checks and balances during the onboarding process to go along with the security measures Push Payments and the merchants themselves already have in place.

"Holding back payments is the direct result of having a lack of information," McShirley said. "The ability to know people faster makes payments go faster because, remember, we are just using existing debit rails."

Push Payments, operating as a white label provider, makes the real-time payments option available to clients through Switch Zero, an all-in-one portal interface; RailStorm, its proprietary API; and PayDoc, a turn-key portal supporting medical payers.

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