Early Warning System’s Zelle money movement app is now a true real-time payments solution. Zelle has always provided near instant transactions to consumers and businesses using the app, but now they have completed the integration of their settlement process to The Clearing House RTP network.
This means that money movement for banks and credit unions can also be instant, as long as the financial institution is integrated with RTP. (For most financial institutions settlement typically occurs through ACH). By synchronizing the settlement process, the settlement risk is nearly eliminated. Bank of America and PNC Bank are two banks that have completed this integration as announced in Early Warning’s press release:
Demand for faster payments has never been higher, and today’s integration milestone eliminates lengthy and costly legacy processes that have long been barriers to many real-time payment settlements between financial institutions,” said Lou Anne Alexander, Chief Product Officer, Early Warning Services. “Our combined foundation will provide all financial institutions an easy solution for new and emerging business use cases, including bill pay.”
Bank of America and PNC Bank are the first to send Zelle payments over the RTP network, providing consumers and businesses a fully-digital payment experience with improved efficiency by leveraging the emerging global ISO 20022 message standard. By sending Zelle payments over the RTP network, financial institutions can enable instant settlement and simpler back-office processing which improves efficiency and reduces costs.
The addition of ISO 20022 messaging with Zelle is interesting. The adoption of this standard was needed for the integration with RTP, but this also opens up opportunities to include more data with the payment which can be very valuable in some use cases, particularly for the build out of business solutions.
In a conversation with Chris Ward, executive vice president and head of product & operations, PNC Treasury Management, this is certainly their intent. They are already developing a request-for-pay solution that makes bill pay transactions available in real-time.
Zelle’s integration with the RTP network marks an important step forward for real-time payments, enabling participating financial institutions to offer instant settlement, improved operational efficiency, and richer payment data through ISO 20022 messaging. As banks expand business-focused capabilities such as Request for Pay, Zelle is evolving beyond peer-to-peer transfers into a stronger platform for commercial and bill payment use cases.
Financial institutions that embrace these enhancements can deliver faster, more seamless payment experiences while reducing settlement risk and positioning themselves to compete in an increasingly real-time payments landscape.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
