Cross River Bank, the partner bank for large fintech startups like Stripe and Affirm, is using The Clearing House’s real-time payments (RTP) network to enhance service to clients and boost its value proposition to future ones.
According to Cross River Bank CEO Gilles Gade, real-time payments will prove attractive to financial startups in third-party payments, cryptocurrencies and marketplace lenders. “There’s a whole industry in the payment space that we’re catering to, and they are thirsty for new products and services,” Gade said. “The onboarding process at the big banks is very lengthy with a lot of obstacles, and it’s not certain. With us, we’re trying to streamline that process and make it easy.”
Companies using Cross River’s banking services can use the RTP network to send, clear and settle payments within seconds, and they can send real-time payments 24 hours a day, seven days a week. The service also allows companies to message customers in real time for invoices and bills.
According to Gade, the real-time payments are attractive to any company that needs to move money on behalf of customers. Although he couldn’t give any specifics, he noted that some “high-profile fintech folks” have approached Cross River Bank about the service. Without the RTP network, customers would have to use ACH payments, which generally don’t clear until the next business day.
The Fort Lee, N.J.-based bank was founded in 2008, and it strives to be a full-service sponsor bank of financial startups. In addition to Stripe and Affirm, its client list includes big names like Coinbase. In June, the company acquired the small business banking provider Seed to expand its offerings and expertise.
The Clearing House is the only private ACH and wire company in the U.S. Founded in 1853, it is owned by 24 different financial institutions, including Bank of America, JPMorgan Chase and Citibank, and settles $2 trillion every day. Any bank that is federally insured can join the RTP network.
In the past, The Clearing House told Bank Innovation that it was trying to have all banks on RTP by 2020. However, the Federal Reserve announced in August its own plans to launch real-time payments service FedNow, which is something The Clearing House has said could stymie that plan.
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