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Mastercard Will Remain the Software Engine Behind the RTP Network

Mastercard Inc. has extended its partnership in a multi-year agreement with The Clearing House Payments Co., which operates the Real Time Payments (RTP) network. The deal continues Mastercard’s role as the network’s instant-payments software provider.

The agreement will drive more volume through the RTP network by maintaining the network’s reliability and efficiency for real-time payments, says Lee Alexander, executive vice president and chief information officer at TCH. The deal is also expected to make the RTP network attractive to banks of all sizes.

“Real-time payments remove the friction associated [with] traditional payment channels, such as the ACH, wire transfers, and checks, when it comes to how banks move money,” Alexander says.

Mastercard has provided the software engine that powers the RTP network since the network’s launch in 2017. Mastercard obtained the software through its 2016 acquisition of VocaLink Holdings Ltd., a United Kingdom-based provider of real-time payment technology. Mastercard paid $920 million in 2016 to purchase a 92.4% share in Vocalink.  

The Clearing House and Mastercard now plan to develop new functionality for financial institutions. “Our aim is to develop more use cases that increase volume over the RTP network,” Alexander says.

The renewal of the partnership also provides banks that use the RTP network with continuity in the technology behind the network, says Steve Mott, principal at payments advisory BetterBuyDesign. “The Vocalink technology works, and for banks that use the RTP network, continuity is a good thing,” Mott says.

While Mastercard is the exclusive software provider for the RTP network, it has other arrows in its real-time payments quiver, such as Mastercard Send, its global P2P service, Mott adds.

“For Mastercard, and even Visa, the strategy when it comes to real-time payments is to place a lot of bets on as many outcomes as possible,” Mottt says. “The more ways real-time payments can be cut and pasted into the payments landscape, the better it is for real-time payments.”

As of Jan. 10, the RTP network reached 67% of U.S. checking and savings accounts, according to The Clearing House. Overall, the network can connect to about to 90% of all U.S. accounts. The RTP network handles 74 million transactions valued at $39 billion per quarter. Some 152 financial institutions use both RTP and FedNow, according to The Clearing House.

“Our long-term partnership with The Clearing House supports choice in payments through the enablement of modern and ubiquitous real-time rails for bank-owned payments,” says Linda Kirkpatrick, president, Americas for Mastercard, says in a statement. “We’re pleased to extend and enhance our support of The Clearing House and its owner banks to deliver on our mutual goals to provide safety, reliability, and efficiency of real-time payments.”

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