As the acquisition of clearxchange by Early Warning closes, The American Banker reported on the progress made by the combined organization towards building a fast payments platform. Most efforts to date have been focused on the security aspects of the platform. This makes perfect sense since faster payments can mean faster fraud if not sufficiently mitigated.
As demand for real-time payments grows, two consortiums led by large banks hope to address the banking industry’s fraud concerns by developing an interoperable identity shield.
“Risk management has always been an Achilles heel that limits use cases and availability of funds,” said Paul Finch, CEO of Early Warning, a bank-owned risk management operation. Early Warning announced Tuesday that it had closed its acquisition of clearXchange, the country’s largest financial institution-led payments network.
Also noteworthy is indication that the platforms first product joint effort will be, not surprisingly, P2P payments and check deposits, presumably with Early Warning’s risk tools embedded:
The initial phase of the combined initiative’s real-time platform will go live with banks during the first quarter and will enable real time P-to-P payments and check deposits. These use cases will likely expand based on the organization’s existing relationships. ClearXchange has added government and corporate payments, while Early Warning has teamed with Fiserv to add scale for deposit accounts and bill payment services.
“Person-to-person payments is an important market and growing, but if you think about faster payments in general, along with the Fed initiative, it’s broader than just P-to-P,” Finch said. The consortium’s goals are to bring ubiquity, safety and soundness and a common user experience to its services, he added
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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