The Clearing House/VocaLink Ink Real-Time Payments Deal

VocaLink, the international payments system company based in the United Kingdom, has signed a pact to develop a real-time payment service in the United States, working in tandem with The Clearing House (TCH).

The companies said in a press release that the deal comes through a letter of intent, and no financial terms were disclosed. The buildout of the system will begin immediately, the firms said. The system, once complete, will be the “most comprehensive real-time payments system ever developed,” the firms said. The focus will be on allowing companies to send and receive real-time payments across existing accounts at financial institutions, with message capabilities that “go well beyond basic payments.”

The new platform will comply with global standards (ISO 20022) and will, after debuting in North America, go on to be launched in Europe and Asia, with initial movement across major financial centers, the companies said. The link between the two companies follows, by several years, VocaLink’s speed in bringing the U.K.’s Faster Payments Service to market. TCH is the sole private sector wire operator in the United States, with market share of about 50 percent of all transactions along those payments rails in the U.S. The main customers are commercial banks and credit unions.

In a statement that accompanied the release on Thursday (Dec. 10), James Aramanda, president and chief executive officer at TCH, noted: “Finalizing this partnership with VocaLink represents a significant milestone in our effort to make ubiquitous real-time payments a reality in the U.S. Once completed, customers will pay or receive money in real time from any financial institution, and with its innovative extensible design, the system will be built to provide the basis for payment solutions currently unimagined.”



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.