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Business Insider Intelligence

Real-time payments are seeing rapid uptake during the pandemic

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Recently, The Clearing House's (TCH's) real-time payments (RTP) network has seen a speedy increase in the number of new payment originators sending business-to-business (B2B) payments worth thousands of dollars, according to Steve Ledford, TCH's SVP of products and strategy, per PaymentsSource.

TCH, which is owned by several major banks, believes it may double the number of US banks and credit unions on its RTP network, which currently works with approximately 30 financial institutions (FIs), over the next two months. Additionally, ACI Worldwide launched several new capabilities for its RTP solution, as it also expects RTP volume to surge and is gearing up to help firms use the payment method.

The pandemic is highlighting use cases for RTP, which may be pushing previously skeptical FIs to take an interest in RTP.

And because the pandemic may be creating a more urgent need for RTP, it could lead fewer FIs and firms to wait for the US Federal Reserve to launch its own RTP network. The Fed is set to launch FedNow, its RTP network that's meant to compete with TCH's, in 2023 or 2024.

Some firms may have planned to put off adopting RTP until FedNow launched because FedNow will only need to break even, potentially making its fees lower than TCH's, and isn't owned by major banks, avoiding concerns about competition. But now that firms' need for RTP may be more urgent, fewer firms may wait for FedNow, boosting the ranks of TCH's network and making it harder for FedNow to lead the market down the road.

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