What Else Can You Do with - Real-Time Payments Summit · 10/10/2018 · What Else Can You Do with...

1 1 ©2018 The Clearing House Payments Company L.L.C.

RTP Summit

Sept 25th,2018

What Else Can You Do with


The Clearing House

• 1853: Founded by New York banks to improve efficiency

and remove risk from daily exchanges

• Today: Operates core U.S. payment systems

– hundreds of banks and credit unions

– half of all commercial ACH and wire volume

• Now: Modernizing U.S. payment infrastructure with

real-time system


Owners

represent 50%

of all DDAs

FI –centric view

of payments

Committed to

network

ubiquity

View real-time

payments as

an imperative

for FIs

Provided the

investment $

to stand up

RTP

View RTP as an

industry

initiative not a

product play


The Update and Lessons Learned


TCH is planning on most U.S. FIs to join RTP by year end 2019 – connecting directly or through a third party service provider

6 7 7 36 144

1,052

3,059

5,065

7,068

0

2,000

4,000

6,000

8,000

10,000

12,000

4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

Source: TCH Product estimates

Participant FIs on RTP – Forecast (4Q17 – YE19)

5 TCH CONFIDENTIAL ©2017 The Clearing House Payments Company L.L.C.


Don’t underestimate broad impacts of RTP

Get client feedback early &

often Leverage partner materials

& learnings

Stay engaged Start small & understand

growth paths

Real-Time Payments – Lessons Learned


RTP Functionality and Opportunity


RTP messages are building blocks for new products and services

Credit Transfer Request for

Payment

Receiver Acknowledge -

ment

Invoice/ Remittance

Advice

Request for Information


Platform for Innovation


Putting new RTP capabilities to work: payments innovation

TCH CONFIDENTIAL


Game changer: Contextual conversation through the entire transaction

Company A is owed $2,000

by Company B Request for Payment

Company A doesn’t know what the extra $3,000 was for

Request for

Information

Company B sends $5000 to

Company A Credit Push

Company B needs to show they

are paying multiple invoices Extended Remittance

Company A has applied the

payments from Company B Acknowledgment

Message


End Customer System FI Interface RTP Message

Application Programing Interfaces (API’s) make more sense with RTP

• Banking and payments become deeply integrated into your customers processes

©2017 The Clearing House Payments Co. LLC

Request for Payment API Integration to

ERP/Payables System

Auto Linking to

Purchase Order

Triggers Approval

Flow in ERP System

System Submits

Credit Transfer at

Scheduled Time

API Integration to

ERP/Payables System Credit Transfer

TCH CONFIDENTIAL


Sample Use Cases


Using RTP: Just-in-Time Invoicing and Payment

Large Supplier Small Business

Buyer

Payment

Request for Payment

(with link to invoice)

E-invoice

Product

Cash

Management

Workstation

Online Banking

Payments

Real-time

Receivables

Logistics

Integration Mobile Banking

Alert

Receiver Confirm

(link to shipping info)

Small Business

Banking

Treasury

Management

©The Clearing House Payments Co. LLC Public


Using RTP: Bill Payment Reminder

Biller Consumer Bill Payer

Payment

Electronic Bill (Request for

Payment) E-billing

Real-time

Receivables

Confirmation

Consumer

Mobile Banking Treasury

Management

Mobile Presentment

– “You have a new bill”

“Pay Now” or “Schedule Payment”

“Payment received for account # xxxxx”

©The Clearing House Payments Co. LLC Public


Representative Use Case – Bill Presentment and Payment Use case scenario: Steve, an Acme customer, is presented with a link from his bank’s RTP system that displays the bill. An option to immediately pay

all or a portion of the invoice is made available. Once Steve is ready to pay, his bank sends the payment directly to Acme’s checking account while

the remittance information is sent directly to Acme’s accounting system via Acme’s Bank’s QuickBooks interface, where it is immediately posted.

Acme confirms receipt of the payment to Steve via RTP.

Acme

Plumbing

Acme’s

QuickBooks

System

7 6

Steve

Thanks!

Acme Plumbing’s Bank

Steve

Bank

5a

1

8

2 Receiver

Confirmation

Payment with

Remittance 5b

9 9

3 4

1. Acme Plumbing creates an invoice in their QuickBooks accounting system to be presented to

Steve, their customer, for payment. QuickBooks creates a file containing a link to the invoice,

(including remittance info) and a Request for Payment for its customers. The Request for

Payment is sent to Steve’s bank for distribution through the RTP system. 2. Acme’s bank uses appropriate customer authentication and payment verification processes to

verify Acme’s Accounting personnel has authority to make payment requests. 3. Acme’s bank submits the Request for Payment messages to the RTP core infrastructure. 4. The RTP core infrastructure validates the payment request and remittance details and forwards

them to Steve’s bank for distribution to the customer. 5. Once Steve’s bank has received the payment request, it validates that he is eligible to receive

RFPs. Steve’s bank then posts the message to his online or mobile banking application.

1. Steve is presented with a RFP that has a “Pay Now” button. Upon selecting the “Pay Now” button, Steve is presented with a pre-populated payment message including all pertinent

data (i.e., remittance information, payment amount, etc.).

2. Once the payment is authorized and submitted, Steve’s bank forwards the payment and remittance message to Acme’s bank via RTP.

3. Acme’s bank informs Acme Plumbing that the customer’s payment, and related remittance data, has been received and funds are available in Acme’s account.

4. Acme Plumbing receives remittance information into their QuickBooks accounting system via

their bank’s interface, avoiding manual entry of payment information, and applies credit to the appropriate customer account.

5. ACME sends confirmation that payment has been posted to Steve vis RTP.

1

2

3

4

6

7

5a

5b

8

9

9 9


David

(Consumer)

Tom

(Agent)

3

6 5a

4

David

(Consumer)

Thanks!

Insurance

Company’s Bank

David’s Bank

5b

1

7

2 RTP validates

payment and

updates MNSP

Confirmation

of payment

1. Tom instructs the insurance company’s bank to pay David the approved settlement amount. In addition to David’s routing and tokenized account number (or alias) used to address the payment, the payment instruction also includes claim information that both the insurance company and

David can access. (Extensive claim information could be included in a remittance advice message or

through a reference to an external source).

2. The insurance company’s bank uses appropriate customer authentication and payment verification processes to verify Tom has authority to initiate payments from this account. They will also ensure

that “good funds” are available. 3. The insurance company’s bank submits the transaction to the RTP core infrastructure. 4. The RTP core infrastructure validates the transaction details and the payment instruction and

updates the multilateral net settlement position (MNSP). Associated claim information is then sent

to David’s bank.

1. Once David’s bank has received the transaction, it checks that the account number is valid and then sends a message back to the RTP core infrastructure that it has accepted (or

rejected) the payment.

2. If the payment is accepted, David’s bank simultaneously credits his account with the claim amount sent by the insurance company so he can have immediate access to the funds.

3. The RTP core infrastructure sends a message to the insurance company’s bank to let them know that the transaction has been made successfully. The insurance company’s bank marks the transaction as complete.

4. The insurance company’s bank confirms the status of the payment and provides transaction details to the insurance company. Each sending bank will decide how their customers will be

notified of transaction status. In all cases, once the payment has been made, a confirmation

message will always be sent between banks.

1

2

3

4

6

7

5a

5b

Public

Representative Use Case – Insurance Payout Use case scenario: Steve, an Acme customer, is presented with a link from his bank’s RTP system that displays the bill. An option to immediately pay

all or a portion of the invoice is made available. Once Steve is ready to pay, his bank sends the payment directly to Acme’s checking account while

the remittance information is sent directly to Acme’s accounting system via Acme’s Bank’s QuickBooks interface, where it is immediately posted.

Acme confirms receipt of the payment to Steve via RTP.


Your Questions


Tim Mills, AAP

Vice President

The Clearing House

Business Development

[email protected]

mailto:[email protected]

What Else Can You Do with - Real-Time Payments Summit · 10/10/2018 · What Else Can You Do with...

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