The two companies collaborated in 2017 to launch the RTP Network, the first new payments rail designed by Mastercard in 40 years. Now, the companies are continuing to work together to develop real-time account-to-account technologies that allow for the transmission of data for the network in the United States and around the world, according to a Wednesday (Jan. 24) press release.
“Technology is providing consumers and businesses greater choice in how they want to pay and be paid,” Mastercard President of North America Linda Kirkpatrick said in the release. “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.”
The expanded partnership is happening at a time when there is much room for growth in the real-time payments space, especially when it comes to B2B transactions. PYMNTS Intelligence found that 62% of firms use legacy methods to pay for commercial goods and services.
Compared to legacy methods, real-time B2B payments provide advantages such as more speed and efficiency, lower transaction costs, improved cash flow management, less risk of fraud, greater transparency and potentially broader access to global markets.
“The real-time payments opportunity is most prevalent in business and B2B transactions,” AI-ID founder and CEO Shaunt Sarkissian told PYMNTS in an interview posted in December. “If I get that money right away, I can start earning interest on it … immediacy has an impact for businesses and allows faster, even different, business models.”
Meanwhile, the PYMNTS Intelligence report “Corporate Changes in Payment Practices: Manufacturing Companies Embrace Real-Time Payments” found that 96% of manufacturers think real-time payments will replace traditional checks when making payments, while 87% expect the same for receiving payments.
“Even though a lot of companies have been able to create instantaneous digital experiences for their customers, the clearing and settlement of the payments have run over traditional rails and can sometimes take days for money to move, which is a kind of interesting dilemma, and it also creates risk within the payment structure,” Colassano said.