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The U.S. payments industry has celebrated the emergence in recent years of two major platforms for real-time payments, but what has insiders particularly excited is the potential for something called the request for payment, or the RFP, as they style it. “The RFP is the first real shift in how money is collected since the lockbox,” says James Colassano, a senior vice president at The Clearing House Payments Co., the New York City-based developer of the Real Time Payments network.
With real-time processing backing it, the RFP allows billers and merchants to receive nearly immediate payment by sending a request through the network to customers and clients who have received services. The Federal Reserve’s FedNow system, which went live last summer and now features more than 700 financial institutions, offers the service. TCH’s real-time network has offered the capability since its RTP network started up in 2017, but now it’s moving to expand the service dramatically this year, Colassano says. TCH is owned by 20 of the world’s biggest commercial banks.
“We’re looking to expand use cases this year,” Colassano told Digital Transactions News during an interview at a trade show in Miami this week sponsored by Nacha, the rules-setting body for the nation’s automated clearing house network. “Banks are now building out that infrastructure.”
While banks are responding to the potential of RFP, use cases for the service keep proliferating, Colassano says. As a result, TCH decided to keep things simple for the time being. “We decided we’d have one set price [for each request] regardless of the size of the bank or the use case,” he adds.
Still, executives at TCH are under no delusions about the potential for a form of billing that carries with it the potency of a real-time payment response, particularly for businesses that depend on timely payment. “The RFP is going to be a paradigm shift,” Colassano says.
TCH is managing the rollout carefully, he adds, cognizant of the newness of the payment service among billers and sellers, let alone recipients of the requests. “We have to introduce it in a way that’s managed so we understand the risks, how risky use cases are to start,” he says. With that caution in mind, TCH is ‘just starting” what it calls phase two of its introduction of RFP, having launched phase one last year. The network has 76 senders so far, but more are soon to come online. “There is a pipeline,” notes Colassano.
