Independent Banker - November 2017 - 79

businesses, a market in community
banks' wheelhouse.
One feature that makes TCH's
platform unique is its messaging
capacity, which enables the transfer
of non-payment-related information.
Practically, this means businesses
of all sizes can use the rail to send
invoices, initiate payroll, send disbursements
and more.
Because TCH's faster payments
system is not an end-user application,
individual apps developed by
banks or other providers can run
on its platform, allowing banks to
provide highly customized services.
Imagine if a customer forgets to send
a payment by its due date. Using
TCH's real-time payments platform, a
community bank can send a reminder
to that customer that a mobile payment
is due and the customer can
" We knew [our RTP
platform] couldn't only
be good for large banks
with deep technical
resources. It needed
to work for any bank
of any size. That was a
design principle from
the beginning. "
-STEVE LEDFORD, THE
CLEARING HOUSE
instantly resolve the problem, saving
frustration and the inconvenience of a
delinquent account and late fees.
Person-to-person (p2p) payments
is another option banks can implement
with TCH's real-time payments
platform. Although RTP is not a p2p
service in and of itself, it does provide
a structure for bank-oriented solutions,
and enables banks to compete
with non-banks. Customers can send
and receive money directly from
their bank accounts, keeping community
banks at the center of their
customers' financial lives.
And there's more good news for
community banks. Although TCH has
not yet released its pricing structure,
Ledford says banks can expect competitive
pricing. In addition, there are
no monthly volume or maintenance
fees, and there is no fee for receiving.
From Bank of America to the smallest
community bank, the price will be
the same.
Other considerations
While this is good news, there are
other issues community banks should
consider before jumping on the RTP
bandwagon. For example, prefunding
is necessary for community banks
that want to begin not only receiving
but sending real-time payments. This
requires finding a funding agent, such
as a bankers' bank or other correspondent
bank, to assist with prefunding.
On the positive side, community
banks no longer have a non-sufficient
funds problem, nor the associated
back-office follow-up, which will
likely streamline processes.
While TCH is first to market,
many questions are rising to the
surface. As more RTP solutions
become available, which will
prevail? Will the Federal Reserve
move to provide bank settlement
capabilities for faster payments or
play a supporting operational role?
Can community banks afford to wait
based on possibilities that may or may
not materialize?
" Looking back, I could have waited
five years to launch remote deposit
capture and still been considered
pretty progressive, " says Giorgio,
a former community banker. " If I
wait five years to do something with
faster payments, I probably won't
be in business anymore. Overall,
community banks need to be more
proactive about embracing these
technologies as they come along. "
Mary J. Yerkes is a writer in
Washington, D.C.
How to get started with
real-time payments
Ready to bring real-time payments
to your bank? Consider
these helpful guidelines.
1. Start with an analysis of
your customers, products
and services. What does
your customer base look
like? What are their pain
points? What are your current
products and services, and
how can you change them to
address these pain points?
2. Educate yourself about
RTP. ICBA, regional payments
associations and vendors are
all available to answer your
questions and offer support.
Take advantage of webinars,
conferences and other educational
resources to boost
your expertise.
3. Contact several service
providers to ask about
their products, services
and fees. Ask whether your
core processor is working
with The Clearing House
and confirm it is enabled for
real-time payments.
4. Work with your service
provider of choice to design
a customer interface. Good
design will make the process
easier for your customers.
5. Get connected. Start with
receiving real-time payments.
Then, consider sending
payments and expanding
your services to include
p2p payments.
6. Innovate. Look for gaps in
your current line and work
with your vendor to create
new products and solutions
that set you apart from
the competition.
independentbanker.org
ICBA IndependentBanker 79
http://www.qmags.com/clickthrough.asp?url=www.independentbanker.org&id=20402&adid=P79E1
Independent Banker - November 2017

Table of Contents for the Digital Edition of Independent Banker - November 2017
