TCH Says Its Real Time Payments Network Can Potentially Reach 70% of U.S. Accounts

The years-long effort to bring real-time payments to the United States picked up steam on Thursday with an announcement from The Clearing House Payments Co. LLC that 70% of U.S. deposit accounts can now access real-time capability via agreements between TCH and third-party processors.

“What we’re talking about here is there are already connections in place to reach 70%. It doesn’t require any new connectivity. The telecom lines are there. What has to be done is to join the network,” says Steve Ledford, senior vice president of product strategy and development at New York City-based TCH. Practically speaking, the financial institutions could be brought live on TCH’s Real Time Payments (RTP) network within little more than a day, he says, adding TCH has “benchmarked” the ability to add as many as 240 institutions per week. Currently, 56% of U.S. accounts are linked to RTP, according to TCH.

TCH began what Ledford calls its “express onboarding process” for its 3-year-old RTP network in December. The effort relies on a number of companies providing core and payments processing, typically for mid-size and small institutions. The roster includes Jack Henry & Associates, FIS, Sherpa Technologies, PayFi, ACI, and COCC, according to information released by TCH. Now, “the market is developing where any financial institution is going to have a chance to join the network,” Ledford says.

He adds that more small institutions began expressing interest in the RTP network following a major August update by the Federal Reserve on the development of FedNow, a rival real-time payments system the Fed first proposed in the summer of 2019. Some observers have speculated that FedNow would slow the growth of RTP as mid-size and smaller banks held off joining as they waited for clarity on FedNow’s plans. In the August update, FedNow officials said they are sticking to the original planned launch date of 2023 or 2024. 

Now, Ledford says the waiting may be over for at least some banks. “The Fed announced what it was going to do [in August],” he says. “That took uncertainty out of the market. That’s when we started to see interest from community banks and credit unions.”

TCH is owned by 24 of the nation’s largest financial institutions.