Plaid announced „Plaid Transfer,” a service that allows businesses (mostly Fintech) to disburse loan payments, insurance payments, or wages instantly

Plaid launches instant payouts. It is compatible with an estimated 60 to 70% of US bank accounts and is built on the service from The Clearing House (TCH), owned by 20 of the largest banks in the US.

Here is what you need to know, according to Simon Taylor Head of Strategy & Content at Sardine:

. Plaid has the perfect UI for consumer-initiated payments or withdrawal approvals. Leveraging Plaid Connect (account linking) to pull relevant bank information creates a slick UX for collecting consumer data. And creates more conversion at checkout. I’m generally bullish on open banking as a great way to start a real-time payment with additional authentication from a user (this is how it works in Europe with something called Strong Customer Authentication). This has become a default way to fund a consumer wallet and could be much more. Plaid might be wise to define a „step up verification” standard like Visa+ did.

. While offering RTP is fantastic, the UX is predicated on connecting successfully to bank accounts. Unfortunately, this has started to break as large banks raise security concerns or look to introduce security standards. So it’s the best UX as long as it works. We have to solve that, and I don’t think the US introducing open banking regulation (1033) alone will do that.

. Europe has regulated mandated real-time payment rails and open banking, yet volumes on both are disappointingly low to date. That’s not to say I doubt they will take off; it’s just payment types take a long time to hit numbers. Apple Pay was launched in 2014, contactless (tap-to-pay) in 2006.

. I love open banking as a way to initiate a real-time payment because you get strong customer authentication (SCA) and *data with the payment*. The worst thing about cards is the data loss during a transaction and how poorly implemented 3D Secure is in the US. Open Banking is a ready-made solution for that.

. The US is having its Real Time Payments (RTP) moment. But like all things in the US, this will be an exception to the rest of the world. FedNow won’t have complete market coverage when it launches, RTP doesn’t yet (and likely won’t due to its ownership model). That’s before we talk about the wallet wars, X-Pays, Paze, Venmo, Visa+, and the competing standards emerging there.

. People always assume RTP will impact cards or banks, but the banks are processing most of these payments behind the scenes. The loser here is checks and cash, as seen in other markets with RTP. The banks are in the driving seat here and won’t give that up easily. Large banks like JPMC and Goldman have Stripe-quality APIs for RTP available today. Game on.

The official Plaid press release here: Announcing Instant Payouts on Plaid Transfer