As the Federal Reserve weighs whether to develop a real-time payments option, an American Banker op-ed today noted that community banks cannot afford to wait on a Fed solution to offer this technology to their customers. Describing his bank’s decision to join the Clearing House’s Real-Time Payments Network, Christopher Richards, chief banking services officer at Cape Cod Five Cents Savings Bank, said that his institution saw it as a business imperative.
“Customer demand for real-time payments is growing and adopting this technological innovation is not optional for banks,” Richards wrote. “Access to real-time payments will likely become a deciding factor when consumers and businesses are seeking a new banking relationship.” Cape Cod Five conducted an in-depth assessment of the pros and cons of joining the RTP network, and Richards noted that “the benefits of moving forward clearly outweigh the risks of waiting.”
While Cape Cod Five continues to carefully monitor any action by the Fed to establish a real-time gross settlement system, Richards highlighted the importance of implementing the solution available to banks now. “The alternative for banks outside of the RTP network is to risk losing customers to other financial institutions and nonbank solution providers,” he said.