Welcome to Payments on Fire® and to our third, now annual, discussion with Steve Ledford, SVP Products and Strategy at The Clearing House, and the leader of his company’s Real Time Payment Network initiative.

As in prior conversations, Steve and George discuss the growth of the RTP Network both in terms of transactions and dollar volume as well as an important metric, the growth in the number of financial institutions and FI processors who are already or in process of connecting to the network.

The evolving set of use cases supported by a new payment system is often surprising. Few expected Zelle’s leading use case to be rent payments. While the RTP Network is in its infancy, Steve shares a number of use cases already in flight.

Changes to the network’s rules also position it for expanded use. For example, the network’s recent increase in transaction size limit to $100,000 positions it far better for B2B transactions.

Like all bank services, strong user authentication is critical and firmly out of scope for the new network. Banks will have to improve their authentication processes because account takeover is a real risk.

As Steve says in this discussion, banks can also reduce the risk of accountholders sending money to bad actors simply by well-timed messaging. Financial institutions can adopt best practices that have evolved in the UK and other markets with similar systems in place. For example, the bank should ask the accountholder if they personally know the recipient of the funds and if they have been pressured to make the payment within a certain timeframe. Both questions are meant to caution the accountholder before pressing Send.

Steve also addresses the announcement of FedNow and its ripple effects on the RTP Network.

New national payment rails are a once in a generation event. New rails, better data representation techniques, and mobile devices make for an innovator’s playground. Take a listen.