The momentum behind real-time payments continues to build with announcements Thursday from Data Center Inc. (DCI), a software provider to community banks, and One Inc., a digital-payments processor for the insurance industry.
Community banks using DCI’s banking software can now receive real-time payments through the RTP network, the faster-payments system from The Clearing House Payments Co. LLC. Banks can also send real-time payments as part of the cash-management functions of DCI’s digital GoBanking app.
By providing connectivity to the RTP network, DCI will enable community banks to see real-time transactions from other banks on the RTP network that serve companies such as Square Inc., GrubHub, PayPal Holdings Inc., and Venmo, and receive instant funding from those sources.
Southwest National Bank in Wichita, Kan., is the first financial institution to use DCI’s connection to the RTP network. “The DCI development team and their open, API-driven core technologies made this a smooth process for Southwest National Bank,” Keith Gray, vice president of strategic partnerships for The Clearing House, says in a prepared statement. “[DCI] banks can now benefit from faster, safer, and smarter digital banking, which will increase customer satisfaction.”
In related news, One Inc announced plans to enable insurance carriers to disburse insurance-claim payments through Mastercard virtual cards and Mastercard Send, which enables rapid funds disbursement for such applications as payroll, insurance claims, and refunds.
One Inc. expects the availability of real-time payments will help to significantly reduce insurance carriers’ cost of issuing claim disbursements, which are typically paid by check. Issuing a claims check is 10 times more expensive than a real-time payment and takes an average of six to 10 days to reach claimants, One Inc. says. Virtual card adoption is expected to grow to more than $5 trillion in transaction value by 2025, up from $1.6 trillion in 2020, according to Juniper Research.