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Barely more than a year after the Federal Reserve launched its FedNow platform, banks and service providers are finding ways to bring real-time payment capability to niche businesses. The latest example emerged early Tuesday with an announcement that Cross River Bank, a technology-oriented financial institution, is working with payments platform MassPay to offer real-time payments in industries where speedier payment flows are more complicated, such as hospitality, marketplaces, independent contractors, and gig workers like ride-share drivers.
The new initiative, which is aimed at the U.S. market, depends on technology from Cross River, specifically an application programming interface between the service and payment recipients. But it also relies on a payout network established by MassPay, the parties say. “This collaboration helps businesses offer their clients, contractors, and employees faster access to funds and a smoother payment experience,” notes Jeff Katz, MassPay co-founder and chief executive, in a statement.
On Cross River’s part, the new service depends crucially on the ability to funnel transactions through that single API, the bank says. This connection enables so-called intelligent routing, which underlays the ability to speed transaction processing. A Cross River spokesperson did not immediately respond to a request for comment on the new collaboration.
The parties say that working together will also boost what they call “optionality,” or the range of available real-time networks. Besides FedNow, the Clearing House Payments Co. LLC has offered real-time payments processing since 2017. Based in New York City, TCH is controlled by many of the nation’s largest banks.
Collaborations with fintechs are nothing new for Cross River. Recent ventures include pairings with Paymints.io, a platform for real-estate payments; Revolut Ltd.; and Astra Inc., a platform for bank-to-bank transfers.
In its most recent update on FedNow, the Fed said the network had attracted more than 600 financial institutions by February. TCH reported around the same time that nearly 500 banks were participating in its RTP network. In its report for the second quarter, TCH reported that its real-time network had processed 82 million transactions worth a total of $55 billion. Those numbers were up 7% and 30%, respectively, compared to the same period in 2023.
