The Clearing House’s Real-Time Payments System Goes Live

The Clearing House’s much-anticipated real-time payments system, dubbed RTP, went live late Monday afternoon, ushering in a new era of faster electronic payments in the United States.

The transaction between The Bank of New York Mellon Corp.’s BNY Mellon subsidiary and U.S. Bancorp’s U.S. Bank was completed at 4:59:40 p.m. Eastern and took three seconds to settle, a TCH spokesperson tells Digital Transactions News by email. The transaction was for $3.50, says a spokesperson for New York City-based BNY Mellon, which originated the transaction with Apex Clearing Corp. Dallas-based Apex provides clearing and execution services to financial institutions and wealth managers.

More big U.S. banks—Citigroup Inc., JPMorgan Chase & Co., The PNC Financial Services Group Inc., and SunTrust Banks Inc.—will be going live with RTP soon, according to New York City-based TCH. The spokesperson says the banks primarily will be using RTP in the early stages for business-to-business, business-to-consumer, and consumer-to-business payments, “though the system has the potential to be used for transactions between any entity: business, consumer, or government.”

RTP is the “first new core payments infrastructure in the U.S. in more than 40 years,” The Clearing House, which is owned by 25 banks, said in a Tuesday news release. The system’s backbone comes from Mastercard Inc.’s Vocalink subsidiary, which runs real-time payment systems in the United Kingdom, Thailand, and Singapore. TCH also got help from processor Fidelity National Information Services Inc. (FIS).

TCH’s system, which enables participants to send detailed messages along with payments that can clear within seconds, tied for the highest marks in the Federal Reserve’s recent Faster Payments initiative in which outside reviewers assessed 16 proposals to speed up U.S. electronic payments.

“RTP has the potential to revolutionize the way payments are made in the U.S.,” said Jim Aramanda, chief executive of The Clearing House, said in a statement. “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.”