Mastercard and The Clearing House Extend Partnership on Real-Time Payments

Rhea-AI Summary

Mastercard and The Clearing House (TCH) have announced an extended multi-year partnership to collaborate on innovative capabilities for real-time payments (RTP) adoption on the RTP network. The partnership continues Mastercard’s role as the exclusive instant payments software provider for TCH’s RTP network, enabling both companies to integrate new instant payment use cases across a range of payment flows. The RTP network offers speed of payment, extensive data exchange, real-time messaging, and 24/7/365 availability. The expanded partnership aims to design the next generation of instant payment capabilities for financial institutions and their customers, with a focus on safety, reliability, and efficiency of real-time payments.

Positive

• Extended multi-year partnership between Mastercard and The Clearing House to collaborate on innovative capabilities for real-time payments adoption
• Mastercard continues as the exclusive instant payments software provider for TCH’s RTP network
• RTP network offers speed of payment, extensive data exchange, real-time messaging, and 24/7/365 availability
• Partnership aims to design the next generation of instant payment capabilities for financial institutions and their customers
• Focus on safety, reliability, and efficiency of real-time payments

Negative

• None.

Insights

Financial Analyst

The extended partnership between Mastercard and The Clearing House (TCH) signifies a strategic move to solidify the position of both entities in the burgeoning real-time payments (RTP) market. This collaboration is pivotal for the financial sector, as RTP systems are increasingly becoming a standard expectation for both consumers and businesses. The instant payment capabilities that the RTP network provides can lead to enhanced liquidity management and optimized capital workflows for businesses, potentially improving the overall efficiency of the financial system.

From an investor's perspective, Mastercard's continued role as the exclusive instant payments software provider for TCH's RTP network could translate into a competitive edge and sustained revenue stream. The ability to handle a wide array of payment flows and integrate new use cases suggests potential for market expansion and a deeper penetration into the digital payments ecosystem. This could have positive implications for Mastercard's stock performance, given the growth prospects of digital payment solutions.

Market Research Analyst

Real-time payments are transforming the payments landscape by providing a level of convenience and immediacy that aligns with the digital economy's demands. The RTP network's coverage of financial institutions that hold close to 90% of U.S. demand deposit accounts demonstrates a substantial market reach. This reach is critical for widespread adoption and sets a foundation for future innovations in payment services.

The partnership's focus on the integration of rich payment and non-payment data indicates an evolution beyond simple transaction processing. The emphasis on security, scalability and the development of new products and services suggests that Mastercard and TCH are positioning themselves at the forefront of payment technology. Such advancements could have far-reaching implications for consumer behavior and expectations, potentially influencing the strategic decisions of competitors and partners within the financial industry.

Economist

The extended collaboration between Mastercard and The Clearing House is an indicator of the growing importance of real-time economic infrastructures. RTP systems can stimulate economic activity by providing immediate access to funds, which is particularly beneficial for small businesses and gig economy workers who rely on swift payments. For governments, the ability to disburse payments instantly can be a critical tool in economic stimulus and support measures.

Furthermore, the adoption of RTP may lead to a reduction in the reliance on traditional payment methods, such as checks, which can be costly and slow. This shift could result in increased economic efficiency and reduced transaction costs. The partnership's commitment to investment and development in this area suggests a long-term view of RTP's role in the economy, with potential benefits for financial inclusion and the acceleration of digital transformation in financial services.

PURCHASE, N.Y. & NEW YORK--(BUSINESS WIRE)-- Mastercard and The Clearing House (TCH) have announced an extended multi-year partnership, bringing the companies together to collaborate on innovative capabilities for consumers, businesses and governments to evolve and embrace the digital economy through real-time payments (RTP) adoption on the RTP^® network. The partnership continues Mastercard’s role as the exclusive instant payments software provider for TCH’s RTP network, enabling both companies to integrate new instant payment use cases across a range of payment flows.

Instant payments became a reality in the U.S. in 2017 when The Clearing House launched the RTP network, the first new payment rail in 40 years designed and powered by Mastercard. For consumers, RTP provides instant access and confidence that a payment is received, 24/7. For businesses, RTP enhances value by simplifying payments for customers, enabling faster wage disbursements, improving liquidity management, and optimizing capital workflows, and for governments, it helps activate local economies through disbursement and settlement.

"Technology is providing consumers and businesses greater choice in how they want to pay and be paid,” said Linda Kirkpatrick, President, Americas at Mastercard. “Our long-term partnership with The Clearing House supports choice in payments through the enablement of modern and ubiquitous real-time rails for bank-owned payments. We're pleased to extend and enhance our support of The Clearing House and its owner banks to deliver on our mutual goals to provide safety, reliability, and efficiency of real-time payments."

Today, real-time payments offer speed of payment, extensive data exchange, real-time messaging, and 24/7/365 availability. Mastercard and The Clearing House continue to support, invest, and develop real-time account-to-account technologies that enable the transmission of rich payment and non-payment data both in the U.S. for the RTP network and around the world.

“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, EVP and Chief Information Officer, The Clearing House. “The expanded partnership will help both companies design the next generation of instant payment capabilities for financial institutions and their customers.”

TCH’s RTP network’s faster payment capabilities are available to financial institutions that hold close to 90% of U.S. demand deposit accounts. The RTP network was built for financial institutions of all sizes and serves as a platform for innovation allowing financial institutions to deliver new products and services to their customers. Financial institutions can integrate into the RTP network directly, through third-party service providers, bankers’ banks and corporate credit unions.

About Mastercard (NYSE: MA)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.

About The Clearing House
The Clearing House operates U.S.-based payments networks that clear and settle more than $2 trillion each day through wire, ACH, check image, and real-time payments. It is the nation’s most experienced payments company, with a long track record of providing secure and reliable systems, payments innovation, and strategic thought leadership to financial institutions. In 2017, The Clearing House revolutionized U.S. payments by introducing the RTP^® network, which supports the immediate clearing and settlement of payments, along with the ability to exchange related payment information across the same secure channel. These RTP capabilities enable all financial institutions to offer safer, faster, and smarter digital transaction services for their corporate and retail customers. Learn more at www.theclearinghouse.org.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240124745602/en/

Media:

Raul Lopez

Mastercard

914-841-7049

Raul.Lopez@mastercard.com

Greg MacSweeney

The Clearing House

212-612-9282

Gregory.MacSweeney@theclearinghouse.org

Source: Mastercard Investor Relations

FAQ

What is the partnership between Mastercard and The Clearing House about?

The partnership aims to collaborate on innovative capabilities for real-time payments (RTP) adoption on the RTP network, with a focus on safety, reliability, and efficiency of real-time payments.

What is Mastercard’s role in the partnership?

Mastercard continues as the exclusive instant payments software provider for TCH’s RTP network.

What are the benefits of the RTP network?

The RTP network offers speed of payment, extensive data exchange, real-time messaging, and 24/7/365 availability.

What are the goals of the expanded partnership?

The expanded partnership aims to design the next generation of instant payment capabilities for financial institutions and their customers.