The Clearing House (TCH), in conjunction with FIS, late last Friday submitted a proposal for evaluation of its Real-Time Payments (RTP) system to the Federal Reserve’s Faster Payments Task Force.
The Clearing House is working to deliver a ubiquitous, real-time payments system for the U.S. and FIS will help achieve ubiquity by offering enhanced RTP services to more than 3,000 financial institutions.
The Faster Payments Task Force is charged with identifying and assessing approaches for implementing safe, ubiquitous, faster payments capabilities in the U.S. TCH has carefully designed the system to meet or exceed the 36 Effectiveness Criteria established by the Task Force.
TCH submitted the proposal jointly with FIS after partnering with them last October. The partnership with FIS helps to clearly demonstrate a path to ubiquity and allows TCH to leverage FIS’s proven ability to develop innovative, customer-facing applications. Last week, FIS announced that the two companies are preparing to launch a real-time payments pilot for financial institutions, initially focusing on the bill payment use case using FIS technology and operating via the TCH RTP platform. Already under development, the pilot will go live in the first quarter of 2017 and bring payments that clear and settle in real-time to the pilot financial institutions.
In addition to FIS, TCH has also partnered with Jack Henry and Associates and D+H. Collectively, these three partnerships will enable TCH’s RTP system to reach more than 10,000 U.S. financial institutions.
“TCH is implementing a foundational clearing and settlement system whose core attributes will enable financial institutions to develop innovative new products for their customers.” said Jim Aramanda, CEO of The Clearing House. “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.”
TCH’s Real-Time Payments system will clear and settle in real-time and will support value-added services and data-rich payments transactions. TCH will own and operate the system. Other key attribute of the system, which align with the Task Force’s criteria, include:
Fast – Payments are completed immediately
Seamless – Uses existing account credentials, eliminating need for FI customers to enroll
Safe – Protection against unauthorized transactions and fraud is built in by design
Multi-purpose – Supports more than just a financial transaction with the ability to include value added services
Innovative – Supports the development of cutting edge products by FIs
Compliant – TCH briefed regulators throughout the planning and design process
Ubiquitous – Built for all U.S. financial institutions
Global-ready – Designed for international compatibility
The RTP system will not be constrained by the limits of legacy payment networks; rather, its design and capabilities are flexible and adaptable to changing technology and customer needs. The system will enable FIs to meet customer needs such as:
Supply Chain Management
Just-in-time bill pay with acknowledgement
Customer service refunds
Insurance claim reimbursements
Informal service payments (e.g., babysitting, lawn care)