Fintech Apex Fintech Solutions is leveraging U.S. Bank’s real-time rails to offer real-time payments on its digital custody and clearing platform in the type of partnership the $587 billion bank hopes to foster with other fintechs in the future.

Apex Fintech Solutions is a business-to-business fintech that sells fractional shares. It digitizes what has been a manual process, automating and providing straight-to-processing along the way, General Manager Connor Coughlin told Bank Automation News.

The partnership, which launched in April, leverages the Real-Time Payment (RTP) network offered by The Clearing House (TCH) to owner banks such as U.S. Bank, $192 billion Citizens Bank and $805.9 billion Bank of Montreal, among others. Owner banks can then offer the service to other banks.

“We’ve seen a lot of value,” Mike Jorgensen, head of emerging solutions at U.S. Bank, told BAN at FinovateSpring 2022 in San Francisco ahead of a fireside chat with the two companies. “And not only working with partners like Apex, but also looking at investing in some of the fintechs.”

The RTP leverages bank secure protocols, including a tokenization service and a dedicated network to provide 24/7, 365 days a year connectivity for payments. Currently, there are more than 200 banks active on TCH network, conveying more than 60% of all the depository accounts in the US today, Jorgensen said.

“We’re an owner bank [in TCH] and, for instance, The Clearing House, that’s really important to us to make sure that we’re on the forefront of the faster payment revolution,” Jorgensen said. “They bring the real-time network, the availability, and the security that allows it to be compliant with all the regulations and all the bank security standards.”

U.S. Bank provides the smart routing as well, so if a payment is coming from a bank that’s not on the network, it will transfer money via wire or ACH, he added. Apex has a high match rate, Jorgensen said, noting that U.S. Bank doesn’t believe there will be “much issue with us needing our intelligent routing.”

‘Frictionless investing for all’

Offering real-time payments to Apex’s customers removes a layer of friction from the fintech’s processes, Coughlin told BAN.

“Our purpose as a company is frictionless investing for all and payments funding,” Coughlin said. “It’s always been a friction point for us, because they take multiple days, we get this pending anxiety: Is my money in my bank account, my brokerage account, when is it going to land?”

Real-time payments allow customers to know exactly where their money is and access it when they need it, which provides more flexibility as to when and where they’re going to invest, Coughlin said.

“If they know that they might need cash quickly in the future, they know that they have access to it, and it gives them more options,” he said.

U.S. Bank also offers aggregate data on RTP, ACH and wire, and shares it via APIs, Jorgensen said. Of the three, RTP provides the richest data, he added.

“We have a software developer portal at U.S. bank that allows multiple different access points to the data,” he said. “If you go to our developer portal, you can pull down every single one of those payment types and have direct access to all the data that goes along with it.”