EMTransfer LLC, a real-estate cash-management platform provider, has teamed up with KeyBank to bring real-time payments to the real-estate industry through The Clearing House Payments Co.’s RTP network.
Using application programming interfaces from KeyBank, EMTransfer can connect parties involved in the real-estate closing process, such as title insurance and escrow companies, real-estate attorneys, and real-estate brokerages, to KeyBank’s treasury-management service, which will enable them to receive their fees and commissions in real time through the RTP network.
The deal comes at a time when many fintechs are jockeying for position in real-time payments ahead of the Federal Reserve’s July launch of FedNow, the Federal Reserve’s own real-time network.
The EMTransfer-KeyBank service, which is a first for the real-estate industry, eliminates the need to use an intermediary for many of the payments associated with a transaction, according to The Clearing House. For example, at closing, a lender can digitally send a down payment from the buyer it has been holding in escrow directly to the seller’s account, as opposed to using a third-party service provider to initiate a wire transfer or check. EMTransfer and KeyBank are using the RTP network because it reaches 62% of demand-deposit accounts, The Clearing House says.
“This is an exciting time for EMTransfer to be teamed up with The Clearing House and KeyBank to truly revolutionize how money moves in real-estate transactions,” EMTransfer chief executive and founder Bob Beams says in a statement. “By aligning our platforms to work together, EMTransfer is providing an industry-specific banking solution to settlement companies that will allow them to work both more efficiently and securely.”
Benefits of enabling real-time B2B payments for real-estate transactions include immediate confirmation of receipt of funds and the ability to pay real-estate agent commissions digitally, observers says. The service allows buyers and sellers that use different title and escrow companies to instantly move money between their trust accounts if their financial institutions are on the RTP network.
In addition, parties such as title-insurance companies can exchange documents such as contracts, invoices, and remittances through the RTP network in the same transaction flow with the payment or payment request. All transactions are tokenized to protect account information, TCH says. Enabling any-time real-time payments also ensures parties don’t miss wire-transfer cutoff deadline, which can result in a per-diem fee on the seller’s payoff amount.
The RTP network’s $1-million value limit for payments allows for higher-value payments for real estate closings, commercial loan funding, and more, according to TCH.
“The RTP network’s $1-million transaction limit, along with its newer features, provides a way for real-estate payments to happen in a more secure and streamlined process,” Rusiru Gunasena, TCH’s senior vice president, RTP product management and strategy, says in a statement.