Banks, fintech companies compete in real-time payments contest

Originally posted in Charlotte Business Journal

Banks and financial-technology companies recently joined forces to participate in a friendly competition focused on the real-time payments space.

Charlotte-based Carolina Fintech Hub partnered with The Clearing House, Oracle and Yodlee to host the RTP Buildathon last month. It drew 13 enterprise participants with more than 50 people registered, said Tariq Bokhari, executive director of CFH.

Bokhari said the contest was meant to foster cutting-edge innovation among more seasoned, enterprise-level entrepreneurs. CFH also hosts an annual hackathon event in Charlotte geared toward college students.

"Payments is a big part of almost everything. Payments is really the thing that makes fintech touch every other industry vertical," Bokhari said.

Finalists were announced at the Fintech Generations Conference in mid-June. That was followed by a trip to New York for the finalists to demo their RTP solutions on June 25. The overall winner was 167% Xcelerated RTP, a joint venture by Fifth Third Bank and AvidXchange Inc. in the Best B2B Solution category.

The venture serves buyers that opt into a supplier's program where they will receive a discount if payments are made early. The capability flags a buyer's account, and if the funds are available it will automatically pay the invoice amount in the specified time frame to secure the discount, said Denise Leleux, senior vice president of supplier services at AvidXchange.

"It's just another service that we would provide to both the buyer and supplier to bring value to both parties," Leleux said. She sees potential to actually bring this capability to market in the future.

The "167%" is equivalent to five-thirds, a nod to Fifth Third bank. And the "Xcelerated" portion brings in AvidXchange's signature "X."

The other finalists included:

  • Best Customer Solution — Team Frictionless, TIAA
  • Enabling Digitally Native Businesses — Plutus, South State Bank
  • Back-Office Improvement — The Levvel is in the Details, Levvel

Kunal Das, chief enterprise architect at South State Bank, said the contest presented an opportunity to explore RTP rails and how they could potentially help customers in the future.

"Initially, people thought fintechs and banks were sort of enemies, but I think there's very much a relationship of mutualism where we both can benefit from each other," Das said. "We always want to experiment and look at technology that may improve our customers' experience."

South State's entry, named Plutus after the Greek god of wealth, was designed to help internet-of-things devices track and submit data, which would then trigger an automatic payment. A real-world application would be delivery companies, for which the device could submit usage data and send automatic requests to cover that usage.

That venture is unlikely to go to market at this point, Das said.

He noted the importance of collaborating with other banks and fintech companies to innovate.

Bridgit Chayt, director of commercial payments and treasury management at Fifth Third, said the collaboration between the bank and AvidXchange is what set the team apart from others. She believes it mirrors what would find success in the real world.

Banks that are unwilling to work with fintech companies are in denial about the future of the market, she said.

"We believe that real-time payments will be a real enabler of commerce in the United States, and while the U.S. may be behind globally in adopting faster payments, we think collaborative efforts with banks and fintechs, where you bring innovation and experience together, will actually end up putting us far ahead globally at the end of the day," Chayt said.