The Clearing House has seen some growth lately attributable to the number of new banks and credit unions of all sizes that have recently joined the real time payments network. PaymentsSource wrote:
The Clearing House has nearly 30 U.S. banks and credit unions on the RTP network, and says it may roughly double that number over the next month or two — and add significant numbers of new users every month “into the foreseeable future,” [senior vice president of products and strategy at The Clearing House, Steve] Ledford said.
RTP now connects about 50% of the country for issuing faster payments. By the end of 2021, Ledford envisions the network covering 80% of the country. Initially, The Clearing House had envisioned RTP ubiquity by end of 2020, but banks had been slower to adopt and some smaller institutions are waiting on the FedNow real-time settlement service due in three to four years.
While last year The Clearing House found that much of the activity through their network was for real time P2P or B2C disbursements like payments to free lancers and gig workers, there has been an interesting up-tick in B2B transactions as businesses cope with new business practices during the pandemic:
Ultimately, the pandemic has given banks and credit unions an opportunity to see if RTP meets their needs. And coronavirus created some scenarios in which businesses seeking supplies had no other option than to move money quickly in order to serve customers during the pandemic.
“We saw a rapid increase in the number of new originators sending thousands of dollars in B2B payments,” Ledford said. “The banks were telling us that some clients had supply chain issues and had to go to new suppliers to be able to stock their shelves. With those new suppliers, they had to pay in advance to get the products.”
Overview provided by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group.
