As RTP Turns 5, Matching Experience to Expectation Is the Challenge

The customer experience encompasses all of the touch points that customers take advantage of when interacting with a company’s employees, assets or operations — including and especially the payment experience.

By streamlining and modernizing their payment experience through digital tools and future-fit investments, companies can provide a better, more repeatable experience for their customers, for whom the seamless experience of an on-demand, platform-agnostic payment solution has become table stakes.

Speaking with PYMNTS for our “Executive Insights Series – Top of Mind,” Jim Colassano, the senior vice president of RTP Product Development at TCH, unpacked the hurdles and opportunities ahead as the real-time payments (RTP) network turns five.

“It doesn’t matter if you are a consumer or you’re a business, the expectation nowadays is that the buying experience, the personal experience, the everyday experience, [these transaction occasions] are all happening in real-time, on-demand and digital. What banks are looking for is how they can match the payment experience to this new day-to-day expectation that their clients have around real-time,” Colassano told PYMNTS.

Strategic Education

Five years ago, on Nov. 14, the first real-time payment was processed using TCH’s RTP network. Over the past half-decade, the migration toward digital and real-time has only accelerated, as have expectations around immediacy. TCH finds itself in a leadership position in the space. They continue to see more banks coming onto the RTP network in a bid to serve their clients, who increasingly live in an on-demand environment.

“[The next step] is going from making that strategic decision to participate, to actually operationalizing and bringing those products to market so that they can support their customers the way they are expecting to be supported,” said TCH’s Colassano.

Because TCH’s RTP network was the first new payment rail to be delivered in the U.S. in 40 years, TCH has the benefit of experience when it comes to socializing the real-time solution across organizations and helping integrate it into their operations. Real-time payment rails are something new for the marketplace, and banks don’t have a lot of education or reference material available around their use cases, at least beyond what the name implies.

TCH has leveraged its first-mover experience to create onboarding packets containing best practices that span operational guidelines and procedures for partner banks when they come on the network. Integrating the RTP network into banks’ back offices and operational teams is key to removing any potential friction points.

TCH even provides use-case matrixes that lay out the different applications of real-time payments that may be relevant for their unique customer audiences.

Business Use Case

The business community has been looking for real-time payments for quite some time. The ability to pay an invoice with precision exactly when it is due and get real-time confirmation back that the payment has been received and applied is critical to financial operations, and is only becoming more so.

When TCH first launched the RTP network, it took a cautious approach and introduced a dollar limit of $25,000 for payments made across the network. As the RTP network became a core tool for many institutions, TCH first increased the limit to $100,000, and this past year has raised it to a cool million dollars.

“The one area where paper checks are still dominant is business-to-business commerce,” Colassano said, “and this actually provides us with the best opportunity in the last 30 years to be able to move business-to-business payments into the electronic exchange environment.”

The decision to increase the limit came because marketplace feedback made it apparent to TCH that transaction limits were inhibiting the growth of B2B payments. TCH has also layered separate value-add services to the RTP network, including a solution that allows businesses to exchange documents back and forth through a secure messaging platform.

“It’s not just moving payments when you talk about B2B commerce,” Colassano said, “it’s also moving the information and documentation that’s associated with it.”

Typically these documents are remittance documents too. The ability to move them instantaneously is a highly attractive solution for businesses, especially given that the RTP network is highly secure. The only participants on the network are banks, making the only available points for access and egress through secure banking channels.