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Table of Contents

Lead Story

Payment IPOs in the public eye

Ann Train


Industry Update

China UnionPay expands mPOS options

Bright future predicted for Global, Heartland

FIs gain time in Home Depot settlement dispute

Countdown for charitable giving


Balancing big data and consumer privacy

The Clearing House stakes its claim in real-time payments

Bob Rohr
First Annapolis Consulting

Mobile forward 2016

What will global payments look like in 2019?

Dispense with bad tech habits in 2016

Selling Prepaid

Gift card spend to reach $26 billion


Online, mobile gaining on brick and mortar

Patti Murphy
ProScribes Inc.

A giving commitment

Thom Aldredge
The Give Back Campaign


Street SmartsSM:
What does the crystal ball say for 2016? - Part 2

Jeffrey I. Shavitz
TrafficJamming LLC

The one man show: Be a piker, dream middle class

John Tucker
1st Capital Loans LLC

Build your business with trust in 2016

Jeff Fortney
Clearent LLC

2016 payment trends - What's to come?

Michael Gavin

Company Profile

Capital for Merchants LLC

New Products

Turnkey e-wallet, e-commerce solution

ShopperPress module
Allied Wallet

iPad POS tableside ordering

TouchBistro 7.0


Switch it up in 2016


ADVISORY BOARD: Welcome to a new year in payments

Letter from the Editors

Readers Speak

Resource Guide


A Bigger Thing

The Green Sheet Online Edition

January 11, 2016  •  Issue 16:01:01

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The Clearing House stakes its claim in real-time payments

By Bob Rohr

Editor's Note: Editor's note: This article was first published in the November 2015 issue of First Annapolis' Navigator. © First Annapolis Consulting. Reprinted with permission.

The real-time payments market is still in its infancy, but recent announcements point to active investments by major players, as well as the emergence of a small set of companies likely to shape the long term trajectory of the market. Last year, The Clearing House (TCH) outlined a roadmap for building a real-time payments system. In late October 2015, TCH announced that it has entered into a letter of intent with VocaLink to help build and deliver key elements of that system.

This announcement was closely followed by an announcement that TCH has entered into a partnership with FIS to help facilitate other aspects of real-time payments delivery. Following on the heels of the TCH announcement, Early Warning publicized its intent to acquire clearXchange to deliver real-time payments to financial institutions. These announcements suggest that the real-time payments market is beginning to take shape and moving another step closer to becoming a reality.

TCH is owned by a consortium of the largest U.S. financial institutions and processes 50 percent of all commercial ACH volume. After last year's announced plan to create a real-time payment system, TCH issued an RFP for real-time technology services, ultimately selecting VocaLink, a U.K. based payment system provider, for its experience in other markets. VocaLink built and currently manages the real-time payment system behind the U.K.'s Faster Payment Service, and is also responsible for delivering real-time payment services to Singapore's FAST network.

VocaLink will build the core switch or "rails" for the real-time network, while FIS will provide connectivity to financial institutions.

Figure 1: TCH real-time platform overview

The real-time platform overview

With its partners, TCH has laid the groundwork to deliver an integrated, actionable real-time payments network (See Figure 1). The network will be built with the customer experience at the forefront, most notably meeting the guidelines issued by the Consumer Financial Protection Bureau (CFPB) and including a number of core consumer benefits (see Figure 2).

Figure 2: Core consumer benefits (as stated by The Clearing House)

Core consumer benefits

Early Warning (EWS), which plans to acquire clearXchange (CXC), a person-to-person network servicing the largest financial institutions, will be a direct competitor to TCH's platform. The EWS / CXC platform combines superior deposit account connectivity and risk management / fraud detection capabilities. In addition, EWS announced a partnership with Fiserv to leverage Fiserv's bill payment network and deposit account connectivity. EWS has stated real-time bill payments will be the first product roll-out, likely in early 2016.

The TCH and the EWS platforms have similar goals – to deliver secure, real-time payments to consumers and businesses. How their platforms will perform, how their services will be priced, and what adoption will look like remains to be seen. Although both companies are in active development, timelines for implementation may vary. TCH has not stated when its solution will be in market, which may give EWS a first-mover advantage to set industry pricing and capture market share.

The partnerships are young and still evolving. In addition, Fiserv and FIS are pursuing their own real-time networks in NOW and PayNet, respectively. With complex market dynamics, successful providers will be those that:

The industry is facing more questions than answers at this time. Given the complexity of the U.S. payments system and competitive dynamics, multiple real-time networks may co-exist in the future, similar to the card brand networks (Visa, MasterCard, American Express, Discover) today. Alternatively, EWS and TCH could merge their platforms to increase scale and expand reach. How the market will evolve remains to be seen, but one thing is clear: real-time payments in the U.S. are closer to reality.

Sources: The Clearing House, Early Warning, Forbes, First Annapolis Consulting analysis.

For more information, please contact Bob Rohr, Senior Consultant,, specializing in Debit and Prepaid.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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