Yesterday, The Clearing House (TCH) launched RTP®, its real-time payments system, the first new core payments infrastructure in the U.S. in more than 40 years. The new RTP system was designed and built through the collaborative effort of TCH's 25 owner banks and meets the objectives of the Federal Reserve Faster Payments Task Force. RTP is open to all U.S depository institutions with a goal of reaching ubiquity by 2020.
The first ever real-time payment on the system was initiated between BNY Mellon and U.S. Bank yesterday evening. They will be very shortly followed by Citi, J.P. Morgan, PNC and SunTrust, who together represent the Industry's earliest adopters of RTP.
"As an industry, RTP positions us like never before to meet the evolving needs of our customers and commercial clients," said William S. Demchak, PNC's chairman, president and chief executive officer and chairman of The Clearing House's Supervisory Board. "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."
"We're excited to complete the first ever bank-to-bank payment using the new RTP system," said Andy Cecere, President and CEO of U.S. Bank. "In a marketplace where banking services are changing dramatically, our clients trust us to provide them with faster, smarter payments solutions."
"RTP is one of the most important payment transformation efforts in our industry. It goes far beyond helping financial institutions address the legacy challenges of payment processing in the US (speed, transparency, cost) and improving the client experience. Bringing online a truly real time, two way, 24x7 payment and messaging system will create new scenarios and entire new markets in ways we have not even anticipated," said Ian Stewart, CEO of BNY Mellon Treasury Services.
"RTP has the potential to revolutionize the way payments are made in the U.S.," said Jim Aramanda, CEO of The Clearing House. "Our RTP system was designed from the ground up to be fast, safe, and a platform for innovation that enables banks and credit unions to build products that are more responsive to their customers' needs."
RTP is open to all U.S depository institutions. Similar to Wires and ACH, RTP will become part of the core industry infrastructure with the potential to support many use cases and underpin financial institutions' client-facing services. TCH is working with a wide array of industry stakeholders, including community banks, credit unions, and financial institution service providers, to drive RTP adoption.
As the first payments system to be built in the U.S. since the birth of the internet, 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. Through this design, developed using technology from Vocalink, a Mastercard company, RTP will support more seamless and efficient e-invoicing, bill pay, insurance claim payments, cash on delivery payments and more. RTP also provides transparency and certainty with immediate confirmation notices that payments have been sent and received and instantaneously settled. Confirmations provide businesses the ability to free up working capital by more precisely managing cash flow and make life less stressful for consumers on tight budgets. Recognizing the fact that it is impossible to predict future demands, RTP was built with a flexible design enabling it to support innovative solutions currently unimagined.
The Clearing House is a banking association and payments company that is owned by the largest commercial banks and dates back to 1853. The Clearing House Payments Company L.L.C. owns and operates core payments system infrastructure in the United States and is currently working to modernize that infrastructure by launching a new, ubiquitous, real-time payment system. The Payments Company is the only private-sector ACH and wire operator in the United States, clearing and settling nearly $2 trillion in U.S. dollar payments each day, representing half of all commercial ACH and wire volume. Its affiliate, The Clearing House Association L.L.C., is a nonpartisan organization that engages in research, analysis, advocacy and litigation focused on financial regulation that supports a safe, sound and competitive banking system.
A Mastercard company, Vocalink designs, builds and operates industry-leading bank account-based payment systems. Our technologies power the UK's real-time payments, settlements and direct debit systems, as well as the UK's network of over 70,000 ATMs. In 2016, we processed over 90 percent of salaries, more than 70 percent of household bills and almost all state benefits in the UK. In addition, our proven real-time bank account-based payment solutions provide more payment choice to customers in Singapore, Thailand and, soon, the United States. For payment news and insight from Vocalink visit CONNECT.
U.S. Bancorp, with 73,000 employees and $459 billion in assets as of September 30, 2017, is the parent company of U.S. Bank, the fifth-largest bank in the United States. The Minneapolis-based bank blends its branch and ATM network with mobile and online tools that allow customers to bank how, when and where they prefer. U.S. Bank is committed to serving its millions of retail, small business, wealth management, payment, wholesale and securities services customers across the country and around the world as a trusted financial partner, a commitment recognized by the Ethisphere Institute naming the bank a 2017 World's Most Ethical Company. In 2016, U.S. Bank contributed $54.2 million to nonprofit organizations across the country through the U.S. Bank Foundation and corporate contributions. Additionally, employees donated more than 219,000 volunteer hours creating opportunities at work, home and play across the country. Visit U.S. Bank online or follow on social media to stay up to date with company news.
Elizabeth Parra, U.S. Bank Public Affairs and Communications