Video Series: Real-time Payments Architecture—Solution Design for a Real-time Environment
This video blog series covers the architectural and solution design aspects of real-time payments. Throughout this series we’ll provide answers to frequently asked questions surrounding architectural considerations for RTP, like which options are available for banks, differences in integration options, general tips and helpful insights for FIs integrating, how to break the entire process down into phases, and more.
Table of Contents
- Jump to Episode 1: Integration Options for Banks
Episode 1 Transcription
Phil Mork: For banks looking to integrate with TCH’s real-time payment system, at a high level, they have a couple of options. One option is to integrate directly into the TCH RTP rails, and the other option is to integrate through a third party service provider, also known as a TPSP. So, some factors that will influence which option a bank chooses to integrate with include things like looking at your existing architecture and determining how RTP is expected to be treated.
Is it just another payment rail or is it part of a much bigger enterprise strategic effort? Also, what are your key vendors in the payment space and what are their capabilities? Do they have a strong RTP offering? Another question to ask yourself is, do you have a payments hub? If you do, that’s a very natural integration point to tie RTP in. If not, then consider your key vendors in the payments space for things such as ACH wire, etcetera, and since they are already integrated into your environment, it’s a very natural question to ask.
Do they have a strong RTP offering and have you looked at their offerings to evaluate how well they would fit with your enterprise? Another key question to ask yourself when you’re looking at these options is what is your organizational preference on solutions? Is it to build or to buy? If your preference is to buy, then you’re going to want to look at using a third party service provider.
Is your financial institution ready for real-time payments? Find out with our 2019 Real-time Payments Readiness Report.
If your preference, however, is to build to maintain maximum flexibility, you have a couple of options. You can definitely connect directly to the TCH RTP rails or you could consider more of a hybrid-type option where you use a more lightweight TPSP who will connect to the RTP rails on your behalf, and then expose to you all the messages so that you can then build and implement that core RTP processing logic, which then integrates with your existing systems.
To go a bit deeper, integrating directly into the RTP rails involves establishing the required connectivity between the bank and TCH. Whereas if a bank chooses to integrate through a third party service provider, then it is the TPSP’s responsibility to connect to TCH. Depending on the particular third party service provider, they often will do more than just provide the connectivity to The Clearing House.
TPSPs can assist your institution with other activities such as conducting message format and syntax validations, validating messages for cryptographic correctness, interacting with other systems within your organization as needed, and also logging messages, and then providing some way for you to view those later through something like an operational dashboard. The TPSP can provide a lot more than just connectivity, and because they are adding this core RTP processing logic as well, it can save your institution quite a bit of time and effort in your RTP implementation.
Use our 2019 RTP Implementation Checklist to help guide your decisions and ensure you are on the right track.
Episode 2 will be posted shortly. Check back soon!