When The Clearing House Payments Co. LLC enlisted processor Fidelity National Information Services Inc. (FIS) last fall to help it launch real-time payments in the United States, it wasn’t ready to say when the system would go live. On Monday, TCH answered that question and also cleared up what types of payments would likely be first in line for accelerated settlement.
TCH announced it will start a real-time pilot for bill payments in the first quarter of next year, working with technology already developed by Jacksonville, Fla.-based processor FIS to get to market sooner. “FIS is one of the biggest providers of bill-pay services in the country. You want to be able to leverage as many assets as you can,” Steve Ledford, senior vice president for product and strategy at TCH, tells Digital Transactions News.
Ledford says TCH is starting with real-time bill pay because the consequences of late payment are acute. “The biggest premium [here] is on the ability to make payment immediately,” he says. But TCH, a New York City-based institution founded in 1853 and controlled by most of the nation’s biggest banks, will likely follow up with such payment types as business-to-business and, quite possibly, business-to-consumer, according to Ledford.
Again, connections with both FIS and VocaLink, another provider TCH announced last fall, are expected to help speed real-time capability for those payment methods. “We’re looking for some rapid uptake by the end of 2017,” Ledford says. “We’re looking to our partners to bring that on.” VocaLink is best known as the builder of the faster-payments system in the U.K.
A real-time B2C application holds high promise, Ledford says. “We’re hearing a lot about business-to-consumer,” he says. So much so, he adds that TCH has doubled the projected potential volume B2C could produce “over the next few years.”
This category could include such payments as insurance payouts, payroll, and customer-service refunds. “Mailing a check takes a while. Sending a prepaid card takes a while. But putting the money in their account while they’re still on the phone with you, that’s satisfaction,” Ledford says.
Messaging linked to each transaction will also ensure payments are properly credited, Ledford adds. “We’re supporting a whole lot of messaging,” he says. “The request for payment, the receipt, and so on all carry rich data.”
TCH, which runs one of two switches for the automated clearing house network, is also participating in the faster-payments initiative started in 2014 by the Federal Reserve (which runs the other one). It sees its coming products working in harmony with criteria the Fed task force is developing. “We don’t really see a conflict there,” Ledford says.
Without giving specifics, Ledford adds TCH can make money on real-time processing. “We’re a utility. We’ll get a payment per click,” he says.