Request for pay (RfP) is getting more attention as real time payments evolve. In May, 23 banks plus some key processors announced their intention to implement RfP through The Clearing House. This signal of support was needed to let potential users know that an audience for RfP for use cases like consumer bill pay or invoiced payments was on the horizon. In another sign that momentum around RfP is growing, Chase Bank publicized that they are launching a B2B payment option using RfP:
The new Chase product enables immediate wholesale payments between companies, or certain consumer-to-business transactions, such as someone buying a car. The bank is piloting the product through an undisclosed fintech partner.
In the auto industry, consumers who don’t take out a loan must pay with cash, a cashier’s check or wire transfer. Chase wants to replace this with a real-time digital payment. Real-time payments in a car dealership can also speed up other processes, such as setting up the vehicle’s registration.
There are many inconveniences today because a wire transfer doesn’t run 24/7,” said Cyrus Bhathawalla, managing director and global head of real-time payments at JPMorgan Chase.
He added that Request for Pay will also provide better transparency about the resolution of business-to-business transactions.
“A corporate would like to know if and when you paid and be told in real time to ship a product or provide a service,” he said. “That’s not present in all payment types.”
But Chase, a founding member of clearXchange, which became the Zelle network, may only be one of the first to apply the model of real-time P2P transactions to commercial payments. Other banks may follow the same pattern.
Initially, Chase will link its RFP product to The Clearing House’s Real-Time Payments network, which also helps power Zelle. That network has more than 150 participants, a $400 average transaction and 60% coverage for demand deposit accounts.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
