Dive Brief:

• Mastercard has entered into a multi-year tie-up with The Clearing House to improve payments capabilities for consumers, businesses and governments and build upon TCH’s real-time payments network, the card network said last week.
• “The new agreement [is] more of a partnership that focuses on co-development of new real-time payments capabilities,” The Clearing House spokesperson Greg MacSweeney said in a statement to Payments Dive. “Developers from TCH and Mastercard will work on enhancements for the RTP network that will help financial institutions provide instant payments capabilities to customers.”
• With the partnership, No. 2 U.S. card network Mastercard continues to serve as TCH’s exclusive instant payments software provider for the RTP network, Mastercard said in its Jan. 24 news release.

Dive Insight:

The partnership with Purchase, New York-based Mastercard builds upon TCH’s efforts to grow its RTP network, which now faces competition from FedNow, the Federal Reserve’s instant payments system launched last year.

TCH, owned by the biggest U.S. banks, began selling its real-time payment network services in 2017. The RTP network is available to financial institutions that hold nearly 90% of demand deposit accounts in the U.S., according to the Mastercard press release.

“The Clearing House and Mastercard designed and delivered the RTP network, the premier instant payment platform in the United States, and have a strong history of working together to deliver innovative, scalable, and secure products,” said Lee Alexander, executive vice president and chief information officer at The Clearing House, according to the press release. “The expanded partnership will help both companies design the next generation of instant payment capabilities for financial institutions and their customers.”

In September, the RTP network exceeded 1 million payments in one day, according to a press release from The Clearing House. RTP had about 460 bank and credit union participants as of December. The growing network faces competition from FedNow, although the launch of that competing real-time payments system may have driven interest in the RTP network.  

As FedNow and RTP vie for business among financial institutions, Mastercard has held back on the Fed’s instant payments system. Though the FedNow system counted the U.S.’s largest bank, JPMorgan Chase, and payments and financial technology companies Fiserv and Jack Henry & Associates as early adopters, Mastercard CEO Michael Miebach noted during an earnings call last July that the system “doesn’t have features” and “doesn’t have a consumer platform.”