Urgent payments in USA - now there are SEVEN options
by Jack Large
There are now SEVEN ways you can make urgent payments in the USA - three new systems: The Clearing Houses’s RTP, NACHA’s Same Day ACH and the Early Warning Service in the Zelle offering in the clearXchange network, and the four well established systems from: FedWire, CHIPS, VISA and MasterCard.
The Clearing House (TCH) in the USA has just launched RTP, its real-time payments system, the first new core payments infrastructure in the US in more than 40 years when $3.50 was moved between two different banks in three seconds.
The new RTP system uses technology supplied by MasterCard-owned VocaLink. It was designed and built via the collaborative effort of TCH’s 25 owner banks and adheres to the objectives of the US Federal Reserve (Fed) Faster Payments Task Force, giving the country the chance to at last catch up with other more advanced real-time nations such as the UK, Denmark, Singapore and so on.
The infrastructure is shown below
Source & Copyright©2017 - The Clearing House
RTP is open to all US depository institutions with a goal of reaching ubiquity by 2020, but it will take some time to gain universal adoption. It is hoped that by the end of 2018 half of all American depositors will have access to the system as the big banks migrate to RTP. Large processing firms are expected to serve the connectivity and processing needs of smaller financial institutions, credit unions and so on.
NACHA Same Day payments
NACHA, The Electronic Payment Association, launched Same Day ACH using two same-day clearing windows in September 2016 and Same Day ACH debits went live in September 2017. NACHA reported 10 Million Same Day ACH paymen made in October, totaling more than $9 Billion, see.
NACHA are working on other ACH modernization efforts such as business-to-business (B2B) directory
services, tokenization of the ACH network and API standardization.
Zelle P2P payment service
Zelle provides near-real-time payment solutions to financial institutions as part of the Zelle offering
via the clearXchange network and uses their network directory of registered banks to enable money movement using customer email or mobile phone.
Zelle supports P2P and also select B2C (e.g., disbursements) and C2B (e.g., consumer to financial
institution (FI) bill pay) for credit push payments. One way the network is broadening its reach is by developing partnerships with providers like Fiserv and FIS.
Four well established services
Then there are the four well established services:
- CHIPS: The largest private-sector U.S.-dollar funds-transfer system in the world, clearing and settling an average of $1.5 trillion in cross-border and domestic payments daily. It combines best of two types of payments systems: the liquidity efficiency of a netting system and the intraday finality of a RTGS
- Fedwire: operated by The Federal Reserve Banks, a real-time gross settlement system that enables participants to initiate funds transfer that are immediate, final, and irrevocable once processed. Depository institutions and certain other financial institutions that hold an account with a Federal Reserve Bank are eligible to participate in the Fedwire Funds Services. In 2008, approximately 7,300 participants made Fedwire funds transfers. The Fedwire Funds Service is generally used to make large-value, time-critical payments.
- VISA and MasterCard: who provide solutions that leverage debit networks (Visa Direct and MasterCard Send) to deliver funds in near-real time to debit cards of participating Financial Institutions.
CTMfile take: For urgent payments in the USA, the problem is increasingly which system to use for each type of urgent payments your company makes? Are there obvious ways to group payments?
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