Utilities and Faster Payments New Options to Transform the ...

[Pages:24]Utilities and Faster Payments ? New Options to Transform the Industry

Utility Payment Conference

Ryan McHugh

Vice President, Immediate Payments Product Management BNY Mellon Treasury Services

September 16, 2019

Agenda

Real-Time Payments ? History and Launch ? Attributes ? Industry Update ? Request for Payment

Tokenized Payments Q&A

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Information Classification: Public

RTP?: History and Launch

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The First New U.S. Payment System Since ACH

Since the ACH network began in the early 1970s, there have been many advances in technology while core payment systems have been slow to catch up. Until now!

Advances in Technology

1698 Steam Engine

1914 Panama

Canal

1911 Electric

Auto Starter

1950 Polaroid Camera

1969 Moon Landing

1983 Internet

1997 Wi-Fi

2004 Google's IPO,

Facebook Launches

2006 Nintendo

Wii?

2008 Tesla Roadster

1981 Space Shuttle

1990 Hubble Telescope

1999 GPS Enabled Consumer Products

2005 YouTube

2007 Apple iPhone?

2015 Apple Watch?

1600

2017

1792 U.S. Dollar

1916 Fed Electronic Transfer

1950 Credit Cards

1974 ACH

1911 Checks/ABA

1930 Lockbox

1966 Debit Card

2004 Check 21 Electronic

Check Conversion

2017 RTP?

& Zelle?

Advances in Payments

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Information Classification: Public

The Clearing House (TCH) Launches RTP Network

First New Core Payments System in the U.S. in More Than 40 Years

? Launched on November 13, 2017. ? Represents the first new payment rail for the U.S. since the ACH network was introduced in 1974. ? Designed and built through the collaborative effort of TCH's 25 owner banks and meets the objectives of

the Federal Reserve Faster Payments Task Force. ? Open to all U.S. depository institutions, with a goal of reaching ubiquity by 2020. ? Allows businesses to send and receive funds in real time directly from their bank accounts without

creating accounts on other services, 24/7/365.

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Information Classification: Public

RTP: Attributes

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Real-Time Payments in the U.S.

TCH's RTP

RTP provides businesses and consumers the ability to send and receive funds immediately 24/7/365 directly from their bank account

Features

Messaging

? Credit push only ($25K limit currently*) ? Irrevocable and final ? USD domestic U.S. payments ? Real-time messaging ? Immediate notification and funds availability ? 24/7/365 with precision execution (date, time) ? Directory services (e.g., Zelle) ? ISO 20022 formatting

Request for Payment: "You owe $XX.xx"

Credit Transfer Remittance Advice

Acknowledgement: "Payment Received"

Request for Information: "Incorrect Amount" Response

*Expectation is to increase transaction limit to at least $100K in 2020, subject to change.

Request for Return of Funds: "Duplicate Payment" Response

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Information Classification: Public

Real-Time Payments Use Cases

Business to Business

Urgent Payments

Conditional Payments

Payments After Hours

Contingency Option

Business to Consumer

Refunds & Rebates

Insurance Claims

Emergency Payroll

Investment Distributions

Disaster Relief

Loan Distributions

Consumer to Business

Late/Due Bill Pay

Premium Payments

Ecommerce/ POS

Investment Acct Funding

Utility Payments

General Services

Person to

To/From

Person Government

Friends & Family

Tax Payments

Informal Services

Account to Account Transfers

Government Distributions

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Information Classification: Public

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