The Clearing House reports that its real-time payments (RTP) network is growing more quickly than anticipated.

Speaking at an industry conference in New York this week, Steve Ledford, senior vice president of products and strategy at The Clearing House, said the network’s transactions are seeing 25% growth, month over month. He emphasized that the network enhances access to real-time payments across the socio-economic spectrum, drawing in large, incumbent financial institutions, along with community banks.

“We have about 90 banks and credit unions in the pipeline and we’re getting more every day,” he explained. “Over half of the country –in terms of checking accounts– are on the RTP network.”

The Clearing House is a private payments infrastructure firm owned by 24 of the largest U.S. banks. The Clearing House’s RTP network, which was launched two years ago, serves all federally-insured U.S. depository institutions. It lets them settle and clear payments in real time. It supports such activities as bill payments, cash management, peer-to-peer payments and emergency disbursements. The Clearing House’s objective is for every financial institution in the U.S. to have access to the RTP network by 2020. It currently reaches 51% of deposit accounts. There are currently 18 banks live on the RTP network, and several new banks will be announced next week, according to a Clearing House spokesperson.

Andrew Haskell, senior product manager at BNY Mellon, one of the RTP network’s original partner banks, explained that real-time payments have supported a swath of business-to-business transactions for BNY Mellon’s corporate clients. He emphasized that the expansion of real-time payments benefits consumers as well as businesses. 

While the RTP network shows promise, BNY Mellon is working with consultants to identify glitches. For example, after customers make payments, some express that they don’t receive confirmations when they are received, he said.

See also: The Clearing House: FedNow could create ‘bifirucation’ in real-time payments 

Haskell noted that the modernization of bill payments could gain the most traction in the next few years through the RTP network’s capabilities. “[Companies] will be able to leverage real-time payments as a replacement for big bills and be able to receive an instantaneous credit transfer back into their system,” he said. “The benefit of this is that they don’t have to deal with checks or the invoicing process.” 

Despite the RTP Network’s potential, The Clearing House’s objective to onboard all U.S. financial institutions may get scuttled by efforts to create a parallel RTP network operated by the Federal Reserve. In August, the Federal Reserve announced plans to launch a separate real-time payments network called FedNow, by 2023 or 2024.

For its part, the Federal Reserve is also using access to real-time payments as a rationale to create FedNow. According to Federal Reserve Governor Lael Brainard, FedNow will allow banks of every size in every community across the country to provide real-time payments to their customers. From the Federal Reserve’s point of view, FedNow’s “nationwide reach” means it offers a different value proposition than a real-time payments network operated by the private sector.

Private-sector actors, including The Clearing House and BNY Mellon, express skepticism about the Fed’s moves. Ledford called FedNow a disruption to its own RTP network, an effort that risks slowing down the ubiquity of real-time payments across the industry.

Despite these challenges, The Clearing House is optimistic on the RTP network’s growth prospects. “It’s a very different way of paying than anything we have on the market,” said Ledford. “We were the first ones to implement [such a program] at this scale in the world.”

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