Digital Transactions Authoritative, insightful and timely information for payments professionals
The Clearing House Payment Co. LLC, operator of the Real Time Payments network, said Wednesday that more financial institutions are making use of its Request for Payment capabilities. Request for payment has been a feature of The Clearinghouse’s real-time payments network since it launched more than five years ago.
The increased use is being driven by demand from businesses to improve their bill-payment capabilities. Before the increase, only a small number of financial institutions made use of the feature, The Clearinghouse says.
With the service, businesses can send a consumer a request for payment along with an invoice or bill embedded in a financial institution’s mobile app. Including the invoice or bill provides consumers clarity about the purpose of the request for payment, a Clearing House spokesperson says. Consumers receiving a request for payment can send payment in real time or schedule a payment for a future date, depending on the financial institution they are using. Consumers receive confirmation of receipt of payment.
“Businesses have been looking for more efficient and user-friendly ways to send bills and invoices to customers, while customers have been searching for a better payment experience that gives them more control,” Rusiru Gunasena, senior vice president of RTP product management at The Clearing House, says in a statement. “Request for Payment provides a way for billers to efficiently and securely send bills and invoices to customers through a bank’s digital channel and allows customers to have full control and insight over the payment.”
FedNow, the Federal Reserve’s real-time payments network, which launched last month, also offers request for payment capabilities.
To reduce the risk of fraud, The Clearing House has implemented guidelines around permissible and non-permissible requests, as well as use cases that will be allowed. Permissible use cases include consumer bill payment, business-to-business payments, and account-to-account payments.
As market adoption grows, the permitted use cases are expected to expand to encompass all types of traditional and digital payment experiences, The Clearing House says.
Several major financial institutions, such as Bank of America, BNY Mellon, Citi, Fifth Third, PNC Bank, U.S. Bank, and Wells Fargo, are making use of The Clearing House’s request for payment capabilities. Other financial institutions, such as Bridge Community Bank and North American Banking Co., have received certification to send request for payment messages on the RTP network. In addition, several technology providers, including FIS Inc., Fiserv Inc., Jack Henry & Associates and Open Payment Network Inc. have received certification to provide request for payment to their financial-institution customers that are real-time payment participants, The Clearing House says.
“Expanding request for payment usage across financial institutions is an exciting step toward wider real-time payment adoption,” Connor McCoughlin, chief commercial officer of APEX Fintech Solutions, Inc. says in a statement. “Through The Clearing House’s real-time payments network and with U.S. Bank as [our] bank partner, we can help eliminate ACH return risk for retail broker-dealers and their investors.”
Apex’s subsidiary, Apex Clearing Corp., provides brokerage services including custody and clearing.
A key driver of Apex’s decision to embrace request for payment is its clients’ need for faster payment. “No matter what time of day, once a request for payment is approved, there are no questions about when funds are coming or going,” McCoughlin adds.
