Regional trends in real-time payments: The US

By : Nav Kullar

October 18, 2018 12:00 PM

Spotlight: A Market-Led Approach to Real-Time Payments


Of the various countries around the world currently making the migration to a real-time payments environment, one nation that is arguably facing a bigger transition than any other is the US.


It's a unique market, not only because of its size and the huge volume of financial transactions taking place every day, but also due to the fragmentation and diversity of the payments ecosystem. Furthermore, where other countries have used government or central bank mandates to accelerate the development of real-time payments, the US is taking a market-led approach, enabling the emergence of schemes such as Zelle, which is focused on instant P2P transactions. While this will give the industry more of a say in how the system functions, it could come at the expense of speed and consistency.


These could prove to be significant factors in the ongoing development and adoption of RTP, the real-time payments system introduced by The Clearing House (TCH) in November 2017.


A revolutionary shift


The Clearing House’s RTP could "revolutionize the way payments are made in the US", according to Jim Aramanda, chief executive of TCH. He said the system was designed to enable banks and credit unions to "build products that are more responsive to their customers' needs", as well as offering the core speed and security that businesses and consumers have come to expect.


Developed through collaboration between TCH's 25 owner banks, RTP is open to all depository institutions in the US and has been given a target of achieving ubiquitous availability by 2020. It is the first new piece of core payments infrastructure introduced in the US for more than 40 years.


William Demchak, CEO of PNC Financial Services and chairman of TCH's supervisory board, said the industry now has an unprecedented opportunity to meet the "evolving needs of our customers and commercial clients".


"At a time when our clients are asking for the ability to conduct their business with greater speed, efficiency and security, RTP will make every day financial tasks such as paying bills, issuing invoices, making payroll or settling insurance claims faster, safer and more satisfying for businesses and consumers across the country," he commented.


With so much change taking place, one of the key challenges for individual financial institutions (FIs) is finding ways to take advantage of it.


Getting on board with change


Having spent a number of decades using the same infrastructure for payments, FIs in the US must now ensure they have clear strategies for moving away from legacy technologies and embracing RTP. This will prove vital for institutions that want to meet the expectations of their customers and take advantage of the opportunities arising in this new era.


There are positive signs on this front. A study by research and consulting firm Ovum, published in December 2017, highlighted the move towards instant payments as a key driver for a $3.3 billion increase in tech investment by banks across North America.


In the US alone, half of banks are set to increase their RTP spend, the survey of more than 7,000 chief information officers and other decision makers showed. The findings also indicated that North American banks are investing in areas such as artificial intelligence and mobile banking based on real-time account data.


The journey to ubiquitous acceptance of instant payments in the US could be a long one, with potential roadblocks including the lack of unification in the market and the need for strong safeguards against fraud.


By the end of this journey, however, the industry could have witnessed some big and exciting changes, including the emergence of entirely new methods and expectations for completing payments.

To discover additional payments insights, ideas and strategies that make your job easier, visit our new payments portal at

Nav Kullar

Payments Marketing Manager

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Nav is a marketing manager for Payments at NCR and is based in the UK. She is responsible for the marketing of NCR Payment solutions, with a specific focus on the transaction processing platform Authentic. Nav has over 15 years of experience in the payments business with previous marketing roles at Visa and Elavon.