The Clearing House's faster payments network goes live
Calling it the first "new core payments infrastructure in the U.S. in more than 40 years," The Clearing House has launched its Real-Time Payments system.
The system, designed by The Clearing House's 25 owner banks and set up under the guidelines of the Federal Reserve Faster Payments Task Force, is open to all U.S. depository institutions and has a goal of reaching ubiquity by 2020.
The Clearing House was on target with its faster payments timeline, having established November 2017 as its launch date more than a year ago.
“As an industry, RTP positions us like never before to meet the evolving needs of our customers and commercial clients,” William S. Demchak, PNC's chairman, president and chief executive and chairman of The Clearing House‘s supervisory board, said in a Nov. 14 press release.
“At a time when our clients are asking for the ability to conduct their business with greater speed, efficiency and security, RTP will make everyday financial tasks such as paying bills, issuing invoices, making payroll or settling insurance claims faster, safer and more satisfying for businesses and consumers across the country,” Demchak added.
The system went live Monday with a real-time transaction between BNY Mellon and U.S. Bank. Those banks will soon be joined on the network by Citi, JPMorgan, PNC and SunTrust, which together represent the financial industry’s earliest adopters of RTP.
“We’re excited to complete the first ever bank-to-bank payment using the new RTP system,” Andy Cecere, president and CEO of U.S. Bank, said in the release. “In a marketplace where banking services are changing dramatically, our clients trust us to provide them with faster, smarter payments solutions.”
Similar to wires and the Automated Clearing House, RTP is designed to become part of the core industry infrastructure with the potential to support many use cases and underpin financial institutions’ client-facing services. TCH says it is working with a wide array of industry stakeholders, including community banks, credit unions, and financial institution service providers, to drive RTP adoption.
RTP is designed to support not only the transfer of funds but also the ability to both request payments and provide critical information about a payment to efficiently deal with back-office reconciliation issues.
In using technology from VocaLink, a Mastercard subsidiary, RTP will support e-invoicing, bill pay, insurance claim payments, cash on delivery payments. RTP also provides transparency with immediate confirmation notices that payments have been sent, received and settled.