Digital Transactions Authoritative, insightful and timely information for payments professionals
Real-time bill payment took another large step forward Wednesday with BNY Mellon’s announcement it is partnering with Verizon Communications Inc. and Citibank to enable Verizon customers with Citibank accounts to pay their bills with near-instant effect.
The agreement connects BNY Mellon as the billing bank, Verizon as the biller, and Citibank as the customer’s bank. Payments will made over The Clearing House Payments Co.’s RTP Network.
In addition to being able to view and pay their Verizon bills digitally, Citibank customers can use Citibank Online to schedule future payments to Verizon on a date and time of their choosing, such as on their next recurring payday or as an on-demand payout from a platform supporting a supplementary income stream, such as a ride-hailing or food delivery app.
The deal is part of BNY Mellon’s efforts to make real-time bill presentment and payment a viable option for its treasury-management clients, such as Verizon.
“E-billing [and payment] has been around for some time, but there has really been no infrastructure to support it at scale nationally,” says Carl Slabicki, managing director, treasury services, for BNY Mellon. “The RTP Network provides an opportunity for us to offer billers and retail banks scale [for this service].”
While Verizon is currently offering real-time bill payment only to Citibank customers, other retail banks are planning to add the service, which will expand Verizon’s reach across its customer base, Slabicki says.
One advantage to real-time bill pay for billers and consumers is that it provides consumers with full transparency, including the ability to receive immediate confirmation the bill has been paid, observers say. That can eliminate uncertainty around when funds will be debited from a consumer’s account. It also reduces the risk that a bill payment paid by check or through the automated clearing house network will be declined for insufficient funds in the customer’s account, thus sparing consumers overdraft fees. An added advantage is that billers don’t have follow up with the customer about payment.
“Real-time bill payment lets consumers control payment by providing them a point of view into their cash flow and manage when a bill is paid,” Slabicki says.
To help reduce the risk around real-time payment, BNY Mellon teamed up earlier this year with Early Warning Services LLC, which operates the real-time peer-to-peer payments network Zelle, to offer businesses and other banks the ability to verify in real time the status and ownership of accounts before the money moves.
BNY Mellon plans to expand real-time bill payment to other treasury-management clients. The bank has been actively educating clients about the service throughout the year, Slabicki says. Plans are also in the works to make real-time bill payment an option for the biller-direct model, Slabicki adds. This model allows consumers to pay billers directly through the biller’s site rather than through online banking.
Mastercard Inc. was the among the first to launch real-time bill payment, announcing its Bill Pay Exchange network in 2018. The network relies on technology from Vocalink, which Mastercard owns. The Clearing House’s RTP Network also relies on Vocalink technology.
