Sherpa Technologies

The Credit Union Times recently interviewed Keith Riddle about the need for credit unions to implement real-time payments to stay successful. Excerpts from the article are included below. You can also read the article in full here.

Currently, 30 credit unions and two corporate credit unions are connected to The Clearing House’s RTP network, and seven corporate credit unions are certified funding agents for RTP participants, according to Melissa Ashley, president/CEO for Corporate One Federal Credit Union ($6.4 billion, Columbus, Ohio). Corporate One has been one of the credit union industry’s RTP strategy leaders – it joined the Federal Reserve Faster Payments Task Force in 2015, is connected to The Clearing House’s network through its CUSO, Sherpa Technologies, and is a certified funding agent. Upon its connection to the network via Sherpa in May 2020, Corporate One’s 700 member credit unions gained the ability receive RTPs to their operating accounts, and the corporate is now piloting outgoing business-to-business RTP functionality with three member credit unions, Sherpa and payment solutions provider Juniper Payments. Juniper’s payment platform, which Corporate One has utilized since 2015, provides the front-end experience for credit union users of RTP via Corporate One and Sherpa.

Sherpa, whose RTP network connectivity services can be leveraged by credit unions nationwide, is also in the early stages of piloting Request for Payment (RfP) services, which will enable billers (including credit unions) to invoice eligible third parties (including members) and receive their payments as RTPs.

Ashley said among the three credit unions piloting B2B RTP send capabilities, preferred use cases have included indirect lending settlements, in which credit unions can pay auto dealers in real-time when an automobile is financed through the credit union, and mortgage settlements.

“[Indirect lending settlements] has been a great use case – think about credit unions using checks or ACH to pay dealers and there potentially being a lag in payments. This accelerates the payment to the auto dealer, making the credit union more competitive to work with and helping them with cash management,” she said.

Credit union participants of the latest Cornerstone survey listed account-to-account transfers as the most important use case for their credit union’s RTP strategy. In compliance with The Clearing House’s rules, Corporate One’s member credit unions leveraging RTP via Corporate One as a network participant are limited to B2B use cases.

Both Ashley and Sherpa CEO Keith Riddle emphasized the need for credit unions to implement RTPs to stay competitive, citing December 2021 research from PYMTS that found access to RTPs is a determining factor in choosing a financial institution for 30% of consumers.

“If that statistic is going to get toward a third, you’re going to have an issue as a credit union if you don’t offer immediate access to funds or real-time payment functionality in some form,” Riddle said, noting that implementing receive-only RTP functionality is a good place to start. “Because all the fintech platforms like PayPal, Venmo, Grubhub and others have already integrated it, if your checking account is not tied to that fintech wallet, you’re disadvantaged.”

They added that the 42% of credit unions in the Cornerstone survey who said they had not determined an RTP strategy should take advantage of the free educational resources targeting credit unions interested in learning more about RTPs. Corporate One has set up an online resource center, including a listing of in-person RTP forums.