Digital Transactions Authoritative, insightful and timely information for payments professionals
Plaid Inc., the open-banking technology provider, will be the first Cross River Bank client to enable a much-desired request-for-payment function for real-time payments, Cross River announced Monday.
As part of The Clearing House Payments Co. LLC’s RTP network, request for payment allows businesses to send a secure request for payment, such as to pay an invoice or, for consumers, to pay a utility bill. Often known as RfP, the function is viewed as essential to growing the scale of real-time payments use in the United States. FedNow, the real-time payments service from the Federal Reserve, also offers RfP. Fort Lee, N.J.-based Cross River says this implementation is just on the RTP network.
Real-time capability for outbound payments has been widely adopted. In February, TCH said RTP volume doubled in the previous 18 months, surpassing 1 billion transactions. And, having raised its RTP transaction limit to $10 million in December, TCH noted its first $10 million RTP transaction also in February.
The growth potential in real-time payments, however, lies in having both send and receive capabilities enabled at financial institutions. While the receive aspect has been more fully adopted, real-time payments providers are earnestly promoting send capabilities. A January survey from Q2 Holdings Inc. found that just 22% of financial institutions had both send and receive functions turned on for the RTP network and just 4% had done so for FedNow.
Cross River says Plaid will enable the RfP function for real-time pay-in for customers of automobile seller Carvana, which sees it as a plus. “With real-time payments through Plaid and Cross River, we’re removing one more layer of friction, helping customers move through the process even faster and, in some cases, even schedule same-day delivery,” Matt Dundas, Carvana’s vice president of finance, says in a Plaid blog post.
Plaid says its implementation of RfP includes instant confirmation and final settlement, with bank authentication via Plaid Link (a tool to link bank accounts). Plaid says its RfP service also can help reduce fraud and returns because it has account verification, balance checks, and bank-eligibility services.
