The Clearing House: Trust Is the Gatekeeper for What’s Next in Payments

Narrator 0:06

This is What's Next in Payments, a PYMNTS podcast. Forward-looking insights from industry leaders on the trends and technologies reshaping payments in FinTech. On this episode, The Clearing House's Sal Kara kaplan says reliability, security, and transparency will determine how innovations gain durable traction.

John Gaffney 0:27

Hi everyone, welcome to PYMNTS TV and welcome to What's Next in Payments. The February edition of What's Next in Payments is asking senior executives to name their word of the year for 2026 or their phrase of the year. You're not allowed to use AI or crypto because we had to introduce some kind of difficulty here. And so far we've seen a lot of executives explain the pressures and priorities that are now reshaping commerce through this word or phrase. Their answers have revealed what's changing, what's urgent, and what winners will need to do differently in the months ahead. And for this episode, we're going to discuss the word of the year or phrase of the year in the real-time payments landscape. And we're happy to have Sal Karakaplan. He is Chief Strategy Officer at The Clearing House. Sal, welcome. Thank you for having me. I'm very excited about the interview. Always work, love working with the Clearinghouse. So what is it? What's your word or phrase of the year and why?

Sal Karakaplan 1:24

Yeah, I mean, look, for me, I think the word of the year is trust. And I think there are uh you know a couple of reasons for this. Um, you know, because of I think what's happening in the market as well as who we are. Uh, you know, in terms of uh kind of what is happening in the market, and we all know uh you know the beauty of payment space, it has been incredibly dynamic uh you know for the last decade or so, and it continues to be. And there are new players uh coming in, uh, you know, there are new technologies kind of being introduced, there are new different flows, payment flows are being introduced. Uh, and all of that change uh you know kind of uh you know requires for us to have trust. So, you know, examples like uh you know possible new skinny accounts from the Fed, uh agentic commerce uh and uh and payments, I mean, obviously on-chain finance and DLT, uh, open banking uh and you know, Froster's interest in the space, they're all new change and dynamic nature of the payments business, and it all kind of goes back to people needing to trust uh, you know, the uh you know the entities that they would deal with. So that's the externality, and I think that's what requires trust. Uh and I think that is the right word for us as well, because of who we are. I mean, we were founded more than 170 years ago, uh, and and we have uh delivered resiliency, reliability, and trust along those years. Uh, and as you know, we are an uh owner of multiple payment networks. And as a payment network, if you don't have trust, uh you do not uh you know survive. Uh so I think for me, uh, you know, 2026 uh is gonna be the year of trust.

John Gaffney 3:10

So, Sal, you know, as a company, the clearinghouse has done has gone a long way toward building trust in instant payments or real-time payments. Um, you have confirmation of payee, we have dispute and error resolution. What else needs to happen to engender trust from the clearinghouse's point of view?

Sal Karakaplan 3:28

Well, I mean, look, you have to uh it's it's one of those things that you have to uh you know have the reliably deliverance, right? Because if it just doesn't uh you know work and if it stops working all the time at any time, then then you're in trouble. Uh so we need to kind of uh you know bring you know deliver that reliability and deliver that resiliency, uh which will then uh over time build trust. Now, obviously, uh you know, on top of that, we need to kind of listen uh the older users, uh, you know, banks uh and non-banks, and understand from them, you know, what is kind of uh shaping their needs uh and and deliver uh you know deliver that uh in in a right way. Uh so I think uh you know our our thinking nowadays is is all about uh kind of what are we hearing from the market, what are the insights, and and deliver that. And I think that will also bring trust.

John Gaffney 4:22

Very well said. So, Sal, what are some of the things that are exciting you? Um, what are some of the opportunities in 2026? What are some of the challenges you expect to see?

Sal Karakaplan 4:31

Yeah, so look, I mean, I think uh you know the the we're spending a lot of time on on many fronts. Uh, I mean, obviously, on-chain finance is is one area that we're doing a lot of thinking. Uh you know, that is uh that is an area that we are uh very much uh you know on top of and I'm trying to understand uh if uh there's a way uh you know for us to play in our natural role and if we can add value uh to all the you know to the ecosystem. Um you know, there that's one. Uh I mean I think uh on the open banking space, uh, you know, we have uh you know an offering uh we call DDA token, where uh you know when uh the credentials, the payment credentials, account credentials uh you know, travel uh out in the open, uh we think that that needs to be protected. Uh and uh so therefore DDA tokens is a service that we give uh to participants to make sure uh that they are secure when they travel. And of course, uh, you know, uh RTP, the real-time payment network, uh, you know, instant payment network that uh you know has been scaling uh tremendously for us. Uh but uh you know, as you know, that is uh a first payment network in more than you know four decades. And uh, we need to keep going. We need to continue to do the plumbing and connect to uh connect to banks, and we need to do the job of uh understanding the client's insights and needs and turn that into usage. So that's uh those are the few things that kind of uh top of mind for us.

John Gaffney 5:56

So if if I had to say what the the main achievement was of just despite the new transaction, outside of the new transaction limits, I would have to say what you guys did really well in 2025 was advanced use cases. What use cases are you most excited about for 2026?

Sal Karakaplan 6:16

Yeah, so uh I I think I think uh the the ones that we have, uh, you know, we need to keep going and uh kind of almost kind of peel the onion a little bit more. The one that we see uh a lot uh is B2C, uh business to consumer. I mean, there are so many variations of business to consumer uh that we're looking at uh because you know it changes in terms of uh you know verticals, uh, you know, industries, and it changes in terms of other uh you know other types of you know B2C use cases. So that that's going to be big. Uh you know, we'll continue to kind of find niche and and and you know narrow kind of uh types of B2C use cases that will be big. Uh I still think uh that A2A uh is is gonna be uh a good one and it will continue to grow. Uh I think as you know, uh the end users uh in this age and era look for uh you know uh instant uh you know gratification and ability to move uh you know your funds between your accounts, uh in you know, maybe outside of banking and to brokerage and and and vice versa. Uh, you know, that needs to kind of uh you know get streamlined and can be done in a more secure way. Uh I know we think we think that's a that's a good one. Um I'd like to I'd like us to kind of start uh to thinking about a little bit on B2B uh as well uh and see what uh you know we can do there uh with uh you know obviously ISO 2022 messaging standard, we have rich data and and B2B is uh also about data. So we need to kind of look into that. So some those are some of the use cases.

John Gaffney 7:51

Very good. Well said. So Sal, what what are customers, whether they're business customers or consumers, what are they going to notice that might be different in 2026 about the the clearinghouse?

Sal Karakaplan 8:02

I'm not quite sure there will, you know, it will be anything uh you know different, right? We will we will uh we will continue to execute uh you know the our strategy uh on uh kind of reliability and and safety and trust. Uh and we will uh you know we we are gonna be behind RTP uh you know to a big uh to a big degree again uh and try to kind of get that scaled. As I mentioned, uh, DDA token is another product that we are kind of excited about that we will uh you know get that scaled. Um so I'm not quite sure there'll be like major now. Obviously, we haven't done any um kind of announcement, uh a public uh you know uh statement around on-chain finance. Right. Uh we may do that, uh, we may not. Uh we're still kind of looking into it. Uh, I mean, I guess if we do something there, that would be a change. Um uh but uh you know other than that, like uh kind of keep going, keep going on the things that uh you know you know we uh we we declare that is important to us. And I think that goes back to again to our you know trust and and reliability point, uh that you know we don't change uh on a dime. Like we only do things that are really you know important to the industry. We are a payments infrastructure, we're all the way at the back, as you know. Uh and uh and we can't uh you know, we need to really understand uh you know how we want to shape the industry. Uh and and so those are some of the things that we're uh you know focusing on.

John Gaffney 9:26

So I would think as chief strategy officer, you do a lot of I would think you do a lot of thinking. Yeah. Yeah. And and strategizing. So um I'm wondering if there's anything that is most exciting to you or anything that kind of keeps you up at night. Like what are some of the strategy points that you think are going to be a big deal this year?

Sal Karakaplan 9:47

Yeah, so uh, you know, the things that are uh that are in our radar uh are are a lot, uh as you said. Uh so I we need to uh uh kind of understand, uh given uh you know some of the uh you know requests for information that the the government had around checks, uh, you know, we need to understand kind of where uh you know the check space is going uh and and kind of uh see what our role is uh and and all of that. You know, that has been initiated by uh you know with NRFI, so we know it's gonna be something that we're gonna uh be spending some time on. Uh, I mean I think uh you know, agentic uh payments, uh especially in the wholesale space, uh combined with open banking, especially in the wholesale space. Obviously, agentic commerce and and open banking uh is here on the consumer space and maybe even the small business space. But on the whole space space, wholesale space, it's a little bit coming from behind. We need to think about uh you know that uh and see how open banking and agentic uh is going to play uh you know part in wholesale payments. So that's an important bit for us. Um you know, obviously, as I mentioned, on-chain is gonna be an ongoing topic uh at DLT uh and and see how that uh and if should shape uh the industry, that's gonna be a big one. I mean, I think we also need to keep an eye on uh a little bit about uh, you know, uh kind of um let's call it broader uh uh you know the the role of USD uh as well as kind of geopolitics and and and the payment system, a little bit of nationalization that maybe we're seeing. Uh I think that's a very macro thing that we need to kind of keep an eye on. I don't know if we're gonna do anything, but I think I we need I need to keep reading and see if we uh you know need to do something at some point. I don't anticipate that to be anything imminent. Uh so those are those are some of the topics.

John Gaffney 11:38

Well, thanks for that. So so do you think this is the year that um instant payments or real-time payments become table stakes for all banks?

Sal Karakaplan 11:47

As far as I'm concerned, they're table stakes already. There you go. Uh and they are uh they they you know, and we will continue to uh you know push that uh uh you know uh that narrative. And I when I mean by narrative is that it actually adds value to the end users. Uh right. I mean, I think uh that's the ultimate goal, and you know, every you know the users need to see value of instant payments, and if they do, then it will, you know, it will uh kind of continue to grow. Uh and we and our job is to kind of uh communicate that value, again, going back to earlier comments that you made around use cases, what use cases you know delivers that value, why is it better than the alternatives, uh, and you know, why is it better than maybe you know the paper-based uh you know payments and so on and so forth? Uh so I think our job is uh you know is that and and hopefully that will make it uh more and more table stakes uh you know for for everybody uh and and and kind of get uh get more ubiquity uh than it already is. I mean it is it is in a pretty good shape. We are um I think last I checked, over 72% of DDAs are reached by you know RTP. So continue to uh you know, we continue to increase that. Uh you know, again, last I checked, more than 1200 banks were part of it. Uh, we will continue to do that. Uh this is a this is a long game. Uh, you know, introducing a new payment rail uh and making it dubicate is a long game. Uh and and you need to stay with it. Uh and and I think we're showing the signs of doing that. Uh we had a really good year last year, and we expect to do the same this year.

John Gaffney 13:17

Long game. Great quote. Sal, my last question. Um, if you had to define success at the end of the year, what what if we're having this conversation New Year's Eve, what would you like it to what would you like it to draw up?

Sal Karakaplan 13:30

Yeah, it it's it's uh, you know, look, I uh I'm gonna give a little bit of an abstract answer to this, uh, because you know, initiatives are always there, and and you deliver those initiatives and so on and so forth. For me, uh, you know, we need to continue to uh get new insights from the markets, uh like new insights from the banks, new insights from non-bank users, new insights from the actual end users like small businesses and consumers and and corporates. And and we need to turn that uh turn those insights into something that we can actually deliver uh to them. So I think to me, that really is the measurable outcome. Uh, you know, and then that turns into what initiative and when you deliver that, in what quality kind of way you deliver that. They're all important, don't get me wrong. But without that kernel at the at the beginning, the other stuff becomes too tactical. Uh, I just think that we as a company, uh and and all every you know, you know, ecosystem uh you know participant needs to be really good at that. And I will uh I will continue to do that with our team, uh, just to understand and listen to the to the end users and clients and get new insights.

John Gaffney 14:41

All right, that's gonna do for this episode of PYMNTS TV. My guest has been Sal Kara kaplan. He's Chief Strategy Officer at The Clearing House. Sal, thank you so much for joining us.

Sal Karakaplan 14:51

Thank you for having me. I enjoyed it.

Narrator 14:55

That's it for this episode of the PYMNTS Podcast. The thinking behind the doing, conversations with the leaders transforming payments, commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode on pymnts.com/ podcasts. Thanks for listening.