The Future of Payments

Article Title Goes Here 10 BANKING PERSPECTIVES QUARTER 4 2018 ASSESSING OUR PROGRESS There is a great deal to be optimistic about when looking at the current environment for real- time payments in terms of the progress made since this initiative was launched several years ago, and even since the first real-time payment was made over the RTP network a year ago. Over the past year, much has been accomplished: • BY THE END OF 2018, HALF OF U.S. ACCOUNT HOLDERS WILL BE READY FOR RTP PAYMENTS, AND SYSTEMWIDE UBIQUITY IS WITHIN REACH. Just one year after launch, the RTP network is on a path to reach nearly 50% of U.S. accounts, and it’s expected to have near-universal reach by the FPTF’s 2020 goal. TCH is working to assist institutions of all sizes to connect to the RTP network – whether directly, or through a service provider such as a core processor, a banker’s bank, a corporate credit union, or other electronic channel providers. • COMMERCIAL CUSTOMERS ARE USING THE SYSTEM FOR EVERYDAY PAYMENTS. The first users of the RTP network are companies using the system to pay suppliers, employees, contractors, agents, and partners. With RTP, both payers and payees benefit from the speed of payment, immediate confirmation, and the transparency provided by the system. More parties are seeing these benefits accrue as adoption of real-time payments expands. • LEADING-EDGE COMPANIES ARE EXPERIMENTING WITH INNOVATIVE NEW PAYMENT APPLICATIONS. As one corporate user has noted, “Solving a pain point is interesting and valuable, but disrupting a business by revolutionizing the payment experience will create a network effect for RTP.” This innovation is underway, leading the way for a potential wave of new business models and payments that will take place on top of the RTP rail. • FINANCIAL INSTITUTIONS AND THEIR TECHNOLOGY PARTNERS ARE LAYING THE FOUNDATION FOR CONSUMER PAYMENTS INNOVATION. When designing and building the RTP network, TCH brought together commercial and retail digital payment experts to develop a new model for consumer bill payments that leverages RTP’s capabilities, such as requests for payment and immediate payment confirmation. These applications will soon be coming into use, while others in the industry are developing ways to reduce the friction of account-to- account transfers and online account opening. In the not-too-distant future, RTP transactions will become the foundation for more-efficient P2P payments, and other uses are limited only by the creativity of the network’s financial service providers. OUR COMMITMENT TO DELIVERING UBIQUITOUS REAL-TIME PAYMENTS IN THE UNITED STATES On the first anniversary of the RTP network going live, TCH is pleased with the progress achieved in bringing real-time payments to the U.S. and excited about the wave of real-time payments innovation that is unfolding. With this in mind, it’s important to revisit our strong commitment to the goals that inspired the launch of this system, including: • DELIVERING A PAYMENTS SYSTEM FOR THE DIGITAL AGE As the first payments rail built for the digital age, RTP’s purpose is to provide an essential real-time payments infrastructure that delivers key new levels of speed, safety, and rich messaging in the U.S. while also serving as the core infrastructure on top of which payments innovation will take place. With RTP, financial institutions can develop new, innovative customer-centric products on top of the system’s modern infrastructure. • ACHIEVING UNIVERSAL REACH FOR THE SYSTEM The RTP network is designed with all financial institutions in mind. Since TCH began working toward bringing real-time payments to the U.S., we have worked diligently to ensure that financial institutions of all sizes have had a voice in RTP’s development. Systemwide ubiquity remains an essential priority for RTP, and TCH remains fully committed to achieving the FPTF’s goal of system ubiquity The RTP N tw rk Turns 1: TCH’s Commitment to Faster Payments By the end of 2018, half of U.S. account holders will be able to receive RTP payments, and systemwide ubiquity is within reach.