Tuesday Topic: Real-Time Payments

A basic tenet of any small business is to avoid relying upon a sole-source of anything that is mission critical.  Even Fintechs have learned the hard way to maintain more than one banking relationship, as many have been "burned" by a bank that overnight decided to "de-risk" from a type of business critical to the fintech's existence.

The mere mention by the Clearing House that they might not play well with others if competition enters the market should be enough to move the Fed past its self-imposed commercial commerce restriction(s).





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Jeffrey Dick
Chairman & CEO
MainStreet Bank
Fairfax VA
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Original Message:
Sent: 04-16-2019 10:26
From: Barb Rehm
Subject: Tuesday Topic: Real-Time Payments

American Banker has a couple of good articles on real-time payments – a topic every banker ought to be following. The first takes a look at The Clearing House threatening to renege on its pledge to charge all banks the same price for real-time payments. The Clearing House made that pledge to the Justice Department in 2016 as part of its bid to avoid antitrust concerns. But if the Federal Reserve decides to move forward with its own real-time payments operation, then The Clearing House says it can't guarantee it won't charge small banks more for the service. The second piece is an op-ed by former Fed officials Thomas Hoenig and Bruce Summers who argue against giving The Clearing House a monopoly and urge the central bank to offer "an alternative, competitive interbank transaction processing service for immediate payment to all depository institutions."

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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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