B2B Payments

Citizens Bank Backs Real-Time Payments For Corporates

Citizens Bank will introduce real-time payment services for its corporate customers beginning in 2019, Forbes reported on Tuesday (Nov. 6). According to Citizens Bank Head of Product Solutions in Treasury Management Matt Richardson, Citizens has been a supporter of The Clearing House‘s (TCH’s) Real-Time Payments service for several years, and told the publication that he believes the U.S. is in need of better payment capabilities.

“This is following the global trend to get to faster payments; that trend is moving throughout the world and we felt the U.S. had to get up to speed in terms of faster payments,” he said. “We still have wire and ACH, but neither is really fit for purpose in a digital economy where the consumer expectation is that things happen immediately. It’s hard to support that with legacy platforms.”

The publication said Citizens Bank is planning to launch the capability for customers to receive real-time payments next year. Soon after, the bank will introduce the capability to initiate real-time payment transactions via commercial online banking platform, application program interface (API) or file transmission.

However, Richardson emphasized the importance for all financial institutions (FIs) to participate, not just TCH owner banks like Citizens Bank.

“The only way for a payment system to really take hold is for it to be ubiquitous,” he said.

Reports said the bank will be looking at the use cases of companies, like utilities, to be able to send requests for payment with the system. In this case, ubiquity is key, he noted, as utility companies must be sure that their customers will be able to accept that request for payment, regardless of their bank.

It’s unclear whether Citizens will introduce its real-time payments functionality for both consumers and corporates. However, according to Richardson, there is a place for this faster payments infrastructure among corporate payers, despite doubts that businesses will want to adopt the capability. Richardson said the visibility of a transaction, and not necessarily its speed, will be key for corporate adoption.

“People will ask why a corporation would want to pay faster,” he told the publication. “From a cash flow perspective, the idea is not to get the money out of a corporate account and to [the] payee faster, not to hurt their working capital, but to give them certainty. With real-time, you will know almost the second that the payment has settled.”

He added that businesses that are able to submit a request for payment will be able to enhance their collections and accounts receivable processes.

“Corporations want to manage risk and have cost-effectiveness, but they also really wanted operational efficiency,” continued Richardson. “The ideal system is being built where payment information accompanies the payment. What could that mean for corporations in an era when lock boxes are still prevalent? It’s a huge opportunity for corporations.”


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.