The Clearing House’s Real Time Payments network is gaining mid-market companies as businesses gravitate toward real-time payments. 

Businesses prefer The Clearing House’s RTP solution because it is established and is used by nearly 67% of U.S. financial institutions, compared with the 22% utilizing the Federal Reserve’s FedNow solution for real-time payments, Michael Cummins, executive vice president and head of treasury solutions at Citizens Bank, told Bank Automation News.

“Companies, when deciding which [payment rail] they are going to use, I think look at the adoption rate,” Cummins said. The Clearing House’s RTP “has been out there since 2017 and I think it’s a little bit more established than FedNow.”  

Last month, Citizens published the “Payments Trend 2024” report, which surveyed 202 chief financial officers, treasurers, vice presidents of finance, heads of accounts payables and controllers of mid-market companies from Feb. 16 to 24 about their existing payment channels and preferences. 

According to the report, the execs said: 

• 92% are using The Clearing House’s RTP while 77% are using FedNow; 
• 92% plan to use both payment rails, while 10% want to use FedNow only; and 
• 65% use Automated Clearing House (ACH) compared to 53% in 2023. 

Rise in virtual cards

As mid-market companies continue RTP adoption, they are exploring new technological payment channels such as virtual cards, Cummins said. 

According to the survey, virtual card usage by businesses jumped to 44% of institutions in 2024, compared to 39% in 2023. Virtual cards are gaining traction because they give businesses more customizable control over expenses, Cummins said. 

A virtual card “allows customers to essentially have a credit card for each transaction,” Cummins said, adding that the digital payment option provides an additional layer of security “because that one transaction can only use that one virtual account number to settle.” 

Last month, payments giant Mastercard launched its virtual card offering for partner financial institutions after seeing pent-up demand from customers, Chad Wallace, executive vice president of B2B solutions at Mastercard, told BAN. 

The virtual card is “available with controls, security features, the ability to restrict that card to very specific use cases and for certain timeframes,” Wallace said.