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TCH System to Provide Payment Information in Real Time

  • By Andrew Deichler
  • Published: 4/25/2017

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AUSTIN, Texas -- The Clearing House (TCH) pulled back the curtain on its forthcoming Real Time Payments (RTP) initiative, providing corporate attendees of NACHA’s Faster Payments 2017 conference with an in-depth look at the system. The system provides information in real-time and reduces overall risk.

According to Jim Colassano, Senior Vice President, Product Development and Strategy for TCH, what sets RTP apart from other real-time payments solutions is that it clears and settles from end-to-end within seconds. Other faster payment methods clear very fast but settle later in the day. “Every aspect of RTP is real-time,” he said. “Everything clears and settle within moments, which means that we’ve basically squeezed just about all of the risk out of the system.”

RTP will run 24 hours a day, 365 days a year. “It will never be off,” Colassano said. “It will be available all the time. Clearing is 24/7. Settlement takes place on an individual transaction basis, so we settle each transaction as it comes through. You get immediate confirmation and simplified reconciliation.”

Colassano noted that banks will no longer need to perform reconciliation in a batch mode. “There’s no need to do that in an RTP system, because each transaction will either accept or fail within seconds,” he said.

Corporates will also be happy to hear that RTP will have complete visibility, end-to-end. The originator of the transaction will know when the other participant receives the money. And it provides immediate confirmation of settlement to the buyer.

Another benefit RTP offers for businesses is the ability to look at the risk profile of the payments that are being made. Corporate treasury professionals will be able to identify certain areas that will allow them to reduce the risk profile of payments they are making.

Perhaps most importantly to corporates is the fact that RTP will also move information through secure banking channels. “So one of the things that characterizes this system is that it’s not only going to be moving money, but it’s also going to moving information about the transaction—invoice numbers, and information that’s required in terms of being able to post that transaction. And it’s chatting method. So if you get the payment and you don’t know how to apply it, you can send the message back through that same secure channel and request additional information in real-time,” Colassano said.

RTP also allows accounts receivable and accounts payable departments to better manage cash positions. “There’s a real benefit for AR and AP departments because they can close out transactions on an immediate basis,” Colassano said.

Lastly, because RTP offers immediate and final settlement, it eliminates a lot of the problems with returns, exceptions and claims. “Because once it settles, it’s final,” Colassano said. “So nobody can come back and revoke that transaction or recall that payment.”

RTP is slated to launch in third quarter 2017.

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