The Clearing House makes history with new US payments system
The Clearing House (TCH) has launched its 24×7 real-time payments (RTP) system, the first new core payments infrastructure in the US in more than 40 years.
RTP 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 US 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 US Bank. They will be shortly followed by Citi, JP Morgan, PNC and SunTrust, who represent the “industry’s earliest adopters” of RTP.
William S. Demchak, PNC’s chairman, president and CEO, and chairman of TCH’s supervisory board, says 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”.
TCH explains that RTP is designed to support the transfer of funds, request payments and provide information to deal with back office reconciliation issues.
Vocalink, a Mastercard company, adds that at its core, the technology behind RTP is an “evolution” of its system developed for the UK, Singapore and Thailand. These solutions have been designed to “run on their own rails, working alongside and between conventional settlement systems”. TCH signed a letter of intent with Vocalink in 2015 to help build and deliver core elements of RTP.
As reported in August this year, Swift said it will provide US institutions with a gateway to RTP. And as instant payments become more ubiquitous in the US, Swift says it will provide an interface to manage the requirements of sending and receiving domestic instant payment transactions on behalf of customers.