BACK

Innovations and Payment Systems

Real-time bill payment should help avoid late fees

Summary

Mastercard announced a system coming in 2019 to pay bills almost instantly using new bank-to-bank payment infrastructure.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Making instant payments to your credit card, phone company, mortgage lender and other businesses is coming a step closer – helping reduce the incidence of late fees.

Mastercard announced a near real-time bill payment platform, called Bill Pay Exchange, with 185,000 billing companies on board, will start in 2019.

“Mastercard is accelerating its vision of digitizing all forms of payments to make life simple, seamless and secure,” said a statement from Colleen Taylor, executive vice president for Mastercard New Payment Flows, North America.

“Consumers will have access to the faster payments technology if it’s offered through their bank or credit union,” she said in an email interview.

See related: Credit card payments: How quickly they should be reflected on your account

Speeding up payments is a priority for the U.S. Federal Reserve. Other nations have leaped ahead of the U.S., increasing transaction efficiency and reducing costs for consumers and businesses.

According to research by Deloitte, Mexico, Sweden and the United Kingdom are already on the road to enabling payments in real time, particularly from consumers to businesses and peer-to-peer.

Mastercard said that partnerships with ACI Worldwide, Aliaswire, Inlet and Transactis will help connect consumers to companies that issue bills. The payment platform will streamline setup, so consumers don’t need to enter billing addresses.

“The ability to present bills in real time and transform the speed of payments opens up doors to create a better experience for banks, billers and payers,” Hoss Mohsenzadeh, President and CEO of Aliaswire Inc., said in a statement.

How real-time payments work

The fast payment system is moving to the “credit-push” model, where consumers authorize and send payments to companies from their bank account. Existing “debit-pull” models, initiated by companies, are more vulnerable to fraudsters who obtain consumers’ account information, Deloitte’s study said.

See related: Can you make a card payment and a purchase on the same day with no interest?

Near real-time payment expands on the same-day ACH batch processing of transactions. Participating banks and credit unions can set up faster bill pay that completes transactions in minutes instead of days. Messaging systems confirm the account exists and has funds available, while the Automated Clearing House payment “rails” complete the settlement of funds between banks.

Speeding payments should help businesses as well as consumers increase efficiency and reduce costs, according to Deloitte’s study.

What’s up next?

In Innovations and Payment Systems

How to send, receive money using Venmo

Venmo is a peer-to-peer payment app owned by PayPal. Whether you’re a Venmo aficionado or considering opening an account, here’s what you need to know, including fees, security, privacy and card use options.

Published: October 11, 2018

See more stories
Credit Card Rate Report Updated: August 21st, 2019
Business
15.55%
Airline
17.49%
Cash Back
17.63%
Reward
17.49%
Student
17.69%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.