The Future of Payments

34 BANKING PERSPECTIVES QUARTER 4 2018 RTP at 1: Citi T THE PROMISE OF REAL-TIME PAYMENTS is tantalizing for corporates and banks alike. Seamless, immediate, and frictionless client experiences, improved treasury efficiency, and the potential for reduced fraud exposure are among the tangible benefits of this new payment rail. But what is perhaps the most compelling value proposition for banks, corporates, and government entities alike is the advent of new business models that this infrastructure is likely to usher into being. Although faster, smarter transactions are delivering on these promises today, widespread adoption is slower than expected. The future of real-time payments remains bright. However, only a concerted effort by all stakeholders will lead to truly material adoption. A HIGHLY ADVANCED PAYMENTS PLATFORM Although it’s a late entrant into the global real- time payments field, the RTP (Real-Time Payments) platform from The Clearing House (TCH) is the first new payments system in the U.S. in 40 years and continues to be one of the most sophisticated systems globally. The primary reason for the platform’s technical sophistication is twofold. First, TCH’s RTP is not merely a clearing and settlement platform; it also provides for the exchange of comprehensive data and non-payment messages. Access to “rich” transaction data gives corporates the potential to achieve deeper insights into cash flows, enabling improved decision-making. Second, having this data readily available makes it possible to achieve straight-through processing along with enhanced posting and reconciliation, increasing efficiencies in exception management and reducing back-office costs. Another distinguishing factor of the U.S. approach has been the partnership between private sector enterprises that has developed to help modernize the overall ecosystem in the absence of a centrally mandated approach. Although the RTP platform and Zelle have been launched as bank-led initiatives, both card networks and FinTech companies (wallet-based models) have also launched a number of near-real-time solutions. Not only do these schemes offer a RTP’S FUTURE REMAINS BRIGHT. HOWEVER, ONLY A CONCERTED EFFORT BY ALL STAKEHOLDERS WILL LEAD TO TRULY MATERIAL ADOPTION. REAL-TIME PAYMENTS: AN INVESTMENT IN THE FUTURE BY ALBERTO CASAS, CI T I