Andrew W. Kirk
THE PROSPECT OF RTP (Real-Time Payments), with near-instantaneous execution of interbank payments, is no longer the financial industry’s best-kept secret. No longer will anyone have to wait for funds to clear or worry if a transaction was completed because of a lack of message transparency.
As retail customers become more aware of RTP’s potential and commercial clients demand greater flexibility, the financial community is receiving an opportunity to show strong leadership and earn customer loyalty. As chief financial officer of an HR-administration outsourcing company that works with small to midsize businesses, I know businesses need to access an additional financial tool.
As a CFO of a business that’s experiencing fast growth, I applaud The Clearing House (TCH) for its insight and leadership on RTP as well as its role in continuing to encourage leading banks to institute the first new payments structure in the United States in more than 40 years. Businesses soon will have important features at their disposal: instant availability of funds, the certainty of payments being final, immediate liquidity, standardized data relating to payments, and two-way communication with messaging. Along with the flexibility of making transfers 24 hours a day, any day of the year, RTP will reshape the scope of payment transactions.
Trion Solutions, Inc., a minority-owned business, is one of the largest professional employer organizations (PEOs) in the United States. Small to midsize companies outsource their HR-administrative needs to us, enabling them to remain focused on their core business and receive cost savings from us. I want Trion Solutions to be at the forefront of the PEO industry in the use of RTP. And that’s why I am working with several leading financial institutions to offer industry-leading insight as the RTP platform is being developed, tested, and made available. I am convinced RTP will revolutionize the highly regulated PEO industry.
Trion Solutions manages the payrolls of more than 500 client companies, servicing approximately 40,000 work-site employees. RTP will let Trion offer client companies the option of providing fast payments to employees, with immediate access to funds. As these companies compete daily to recruit and retain employees, RTP can be an attractive and differentiating selling feature – i.e., there will be no need to wait for a check to clear because employees will have immediate access to their cash. And the ability to make and accept RTP any time of the day, any day of the week, is a game-changer.
When the need arises, Trion accommodates client requests for emergency payroll services outside the standard processing protocol and, in many instances, within all four national time zones. The ability to effectuate transactions during “normal business hours,” especially with our clients in the Mountain and Pacific time zones, is an important client-experience performance indicator. RTP will allow Trion to improve client satisfaction by going beyond time-limiting payment options to fund work-site employee payrolls immediately, eliminating “the check is in the mail” and having to wait for Automated Clearing House (ACH) transactions to process the next day.
The successful adaption of RTP-like platforms in other countries is undeniable. Japan was an early adopter more than 40 years ago; Switzerland more than 30. The United Kingdom has had an RTP-like platform in place for the past 10 years, and more than 20 other countries – including Denmark, Sweden, Poland, India, and Thailand – have done the same.
The United States has taken a more cautious route, but for a good reason. Unlike other countries, we have the effective and efficient ACH system in place, and smartly, we chose to watch closely how RTP was managed in these countries, learning from their experiences. Also, security issues need to continue to be fully vetted. Cybersecurity, fraud detection, and the need to link RTP to a third-party directory of databases to verify user identities are complex and critical areas that need to receive passing grades before they proceed. These issues, however, are being addressed by TCH and participating banks, and the process is moving forward.
What is Trion Solutions doing to make RTP more effective and accepted by our clients in the near term? Trion is fully engaged in supporting the integration of RTP by participating in preplanning and rollout discussions with our two banking partners. We continue to identify and quantify the challenges within our pilot program and provide feedback to our client base to maintain our industry-leading position. Internally, we are developing standard operating procedures and processes as part of our RTP early-adoption initiative.
As such, in early 2019, Trion will invest capital to promote an enhanced IT platform to accommodate RTP while working with our enterprise resource planning software and banking business partners.
All of us should participate shaping the RTP platform, which will be implemented across numerous and diverse industries. I look forward to continued participation on TCH’s Corporate Advisory Board and in my further discussions with financial institutions as we help shape the future of RTP during this exciting time in our industry.
