TCH: 2021 Innovation Goal: Better Payments For All


Russ Waterhouse, executive vice president of product development and strategy at The Clearing House, discusses how the payments industry must provide better ways to serve everyone as the economy recovers. “The aspiration for true payments innovation should be better payments for all,” says Waterhouse in “A Look Forward: What Executives Wish for America and the World in 2021.”

The No. 1 wish on my list — and I hope everyone’s list — is the end to the COVID-19 pandemic, which continues to cause so much suffering around the world and is preventing people from living their lives as normal. The inability to “live your life” has repercussions across society and the economy, as people are unable to safely visit loved ones, travel, dine out, meet with friends, attend community events, and so on. Luckily, as I write this, numerous vaccines are being deployed or are in the final stages of testing and approval, which should help to drastically reduce the pandemic’s impact by mid-2021.

With the entire nation hurting from the pandemic and as we begin to rebuild in 2021, we need to make sure the payments industry provides better ways to serve everyone, not just micro-targeted solutions that cater to the tech-savvy. The aspiration for true payments innovation should be better payments for all. With this in mind, financial institutions (FIs) continue to enhance their digital platforms to provide better services and payments for their customers. Many are living paycheck to paycheck, and others who have lost jobs due to the pandemic need to be able to access and use their money instantly.

Likewise, small business owners — who are responsible for the creation of 64 percent of new private-sector jobs annually — and the growing segment of “micro-merchants” need faster access to funds during these times of economic stress to purchase inventory, pay bills and pay employees.

On the RTP® network, FIs and their customers are finding innovative ways to offer real-time payments. For instance, more companies are providing “pay on demand.” Grubhub now offers drivers the option to receive a real-time payment so they can access their earnings immediately at the end of every shift. Similarly, micro-merchants, such as a vendor at a farmer’s market or a craft seller on Etsy, are getting instant access to funds through Square. And the merchant acquirer Elavon offers small businesses, such as a local eatery or gift shop, the ability to have funds sent instantly over the RTP network to their account at the end of every business day.

So, while the big wish for America is to get past the COVID-19 pandemic — which will remove the biggest obstacle to a broad economic rebound — payment providers have a role to play, too. The RTP network provides immediate availability of funds, and as RFP (request for payment) begins to scale in 2021, it will offer consumers a new level of control, transparency, safety and speed. Combined with more FIs joining the network, this will ensure that more individual Americans and businesses have easy, fast, 24/7 access to the money in their accounts. This will, in a small way, help the economy stabilize and grow.