The Clearing House Looks to New Commercial Use Cases to Drive Real-Time Payments Growth

When The Clearing House launched its RTP® network in 2017 — the first new payments infrastructure in about 40 years — the transaction limit was $25,000.

That was before the digital shift hastened by the pandemic, supply chain disruptions and the wider embrace of enterprises toward doing business online, 24/7.

Times change, and so do payments networks. The Clearing House has raised the ceiling of its transaction limit over time, as more banks and more enterprises have found a need for fast, efficient fund flows between accounts. The limit was raised to $100,000 in April 2022 and then $1 million that same month.

By the Numbers

Now, the transaction limit has been raised to $10 million, a response to the fact that, as Jim Colassano, TCH’s senior vice president of RTP Product Development, told PYMNTS, “we’re seeing an explosion of new use cases on the network, and we’re seeing a lot more activity.”

The network has more than 270,000 businesses sending real-time payments each month — and they’ve let TCH know that they need higher limits, as Colassano put it, “to be able to appreciate the full value of the network, leveraging speedier payments to improve real estate transactions, supplier chain payments, to name just two use cases.”

“We’re starting to see the ‘turn’ in the hockey stick,” noted the executive, who told PYMNTS that while volumes had been relatively stable at the lower transaction limits, momentum has been building and more originators are signing onto RTP, with more than 1 million transactions monthly, a transaction count that is growing.

“We determined it was time to make the leap from $1 million to $10 million, as opposed to doing this in marginal, incremental steps,” said Colassano, who added that, especially for mid-sized and larger corporates, $1 million to $5 million transactions (or more) can be commonplace when paying one another — and the $1 million limit had been a headwind to more volume crossing the network.

Network Limits and Bank Limits

The $10 million limit is networkwide, but banks can set their own parameters for “send” transactions based on their own risk tolerance, by industry vertical, and even for an individual corporate client, Colassano said.

“In addition to network controls, there are also controls at the bank to make sure that only valid transactions are getting into the network, and for banks to manage the risks within their own client base,” he said.

Asked by PYMNTS about new use cases that are likely to see momentum, Colassano said instant merchant settlements will gain favor, especially in times when liquidity is critical, and especially during peak holiday shopping seasons.

Payroll funding is another area ripe for growth, Colassano said.

“It usually takes about a week to get everything funded, settled and cleared, and then for employees to get paid,” he said. The new limits “will allow companies to compress that time frame by moving funds to the payroll provider instantly and with finality.”

Intercompany funds movement will speed up, too, between accounts held at different banks.

As Colassano told PYMNTS, with an eye on the shift to instant payments, “All of the indicators are green and positive. 2025 will be a banner year. … We think it will open up opportunities for use cases that we have not even seen yet.”

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