In the US, real-time payments continue to grow as FIS Inc. launches RealNet. RealNet is a cloud-based software-as-a-service platform or (SaaS) that allows consumers, businesses, and governments to embark on account-to-account transactions.
Known as a “network of networks”, RealNet will take advantage of The Clearing House Payment Co. LLC’s real-time payment network alongside the automatic clearing house’s same day networks to accelerate the processing, clearing, and settling of all payments.
In addition, FIS has developed a decision engine in order to determine the quickest, most “cost-efficient” network to route a transaction over.
The Benefits
Thanks to its connection to the ACH, RealNet will have the capability of facilitating all transactions for deposit accounts in the US. It is not limited to the accounts connected to The Clearing House’s RTP network. It is estimated that TCH’s network can easily reach 70% of deposit accounts throughout the US.
Ginny Chappell, senior vice president and general manager of global real time payments, U.S. market, for FIS, says:
“With RealNet, we are aggregating all the pieces [of real-time payments] in the U.S.The RTP network is not able to reach all deposit accounts now. Merchants and businesses also require [separate] connections to each of the networks in the RealNet platform. RealNet provides a single point of integration to all these networks.”
FIS also sees RealNet as the perfect platform to capture more business-to-business type payments such as account receivable and payable payments. They also hope to incorporate cross-border payments. Businesses can also take advantage of real-time payments in order to facilitate business to consumer payments, like refunds.
Consumers can take advantage of the platform in order to perform account-to-account payments. This can take the form of a large amount of money being transferred from a brokerage account to a bank account for the purchase of a home.
This is a brilliant opportunity for consumers to have full control as to how they move their money. They no longer have to worry about paying the costs of a wire transfer. By using this platform, they also can move their money faster than ACH transactions.
Since it is a cloud-based, SaaS platform, RealNet will use application programming interfaces (APIs) in order for it to integrate with other FIS central banking and payment solutions. This new platform will be readily available in the US, followed by the U.K. and Europe. Additional markets will be added later in the year.
Real-Time Payments, The Future Of Money
There is no doubt that real-time payments are exploding and the pandemic surely has had its part in generating this interest. In a survey conducted by PYMNTS, 35% of US consumers said that the ability to receive payments in “real-time” was “extremely” important. About 24% of those surveyed also said that they would be willing to switch from their current banking institution to one that would offer real-time payment solutions.
In a separate study in collaboration with VISA, PYMTS also discovered that more than 25% of companies in the U.S. and the U.K. do plan to revamp their systems in order to accept real-time payments in the next three years.
In a few years, the U.S. Federal Reserve also has plans on unveiling its own RTP system.