The Race to Win Real-Time Payments

Last week brought two major partnerships in the push for real-time payments:

  1. TCH with VocaLink
  2. clearXchange with Early Warning

The Clearing House (TCH) is a private-sector ACH Operator that processes about half of all commercial ACH volume in the country. Its partnership with payment systems provider VocaLink aims to bring a real-time payment system to the US.
Bank of America, BB&T, Capital One, JPMorgan Chase, US Bank and Wells Fargo collectively own clearXchange, a digital payments network, and Early Warning, a risk management solution. In a joint statement on the partnership of clearXchange and Early Warning, the banks announced: “Our customers want the ability to make payments to anyone, in real-time, making funds instantly available in the recipient’s bank account.”
Both partnerships aim to merge immediate funds availability and fraud management in a single platform. These abilities will extend across p2p payments, disbursements and bill pay for consumers, businesses and government clients.
Though other countries have implemented a single national payments platform, to do so requires a significant effort— especially in an environment as complex as the US. The announcements of two major partnerships that are attempting to tackle the task shows that the US is ready to progress toward a singular, real-time payment environment.
More notable than the partnerships themselves, however, is the competition between the two solutions. Competition is not only healthy for the US marketplace, it will push each solution to act with more efficiency, offering a higher degree of usability and convenience. Ultimately, these announcements forecast a future of commerce that is safer and more expedient for its participants.
Is one of these partnerships better positioned to win over the other? Is there perhaps a third solution that will win? Please feel welcome to share your thoughts below.

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