What is RTP (Real-Time Payments)?
RTP, the Real-Time Payments network operated by The Clearing House, is the first new core payment rail in the US since the launch of ACH in the 1970s. Launched in November 2017, it enables instant credit transfers between participating US bank accounts 24 hours a day, 365 days a year, with finality on settlement and a per-transaction cap of $1 million.
What RTP Is
RTP is a real-time payment service owned and operated by The Clearing House (TCH), a private consortium of the largest US banks. It launched in November 2017 as the first new payment rail in the US in over 40 years. RTP runs 24/7/365 and offers immediate finality: once a transfer settles, it's done.
RTP is a credit-push network. The sender's bank initiates the payment, the receiver's bank gets the funds and credits the receiving account, all within seconds. There's no debit equivalent on RTP. If a business wants to pull money from a customer's account in real time, that's still ACH or card territory.
Reach
RTP's reach has grown steadily. As of 2024, RTP reaches accounts at more than 600 financial institutions in the US, covering roughly 70% of US deposit accounts. The largest banks were on RTP from launch or shortly after. Smaller banks and credit unions have joined through service providers, core banking platforms, and aggregators that handle RTP connectivity on their behalf.
How RTP Works
The flow is straightforward:
- The sending customer instructs their bank to make an RTP payment
- The sending bank validates funds, sends the payment message to RTP
- RTP forwards the message to the receiving bank, which validates and accepts
- RTP settles the payment between the two banks via a joint settlement account at the New York Fed
- The receiving bank credits the recipient's account
- Both banks receive confirmation
The whole process completes in seconds. Unlike Fedwire, which closes overnight and on weekends, RTP runs continuously.
RTP uses ISO 20022 messaging, which carries richer remittance and reference data than legacy formats. This enables better straight-through processing for businesses receiving large volumes of payments.
Settlement Model
RTP uses a prefunded settlement model. Participating banks fund a joint account at the Federal Reserve Bank of New York in advance. As payments flow, RTP debits the sending bank's portion of the joint account and credits the receiving bank's. This eliminates settlement risk: no payment goes through unless the sending bank has prefunded liquidity available.
This is a key structural difference from FedNow, which settles directly over each bank's individual master account at the Fed.
Transaction Limits
RTP's per-transaction limit started at $25,000, then rose to $100,000, $1,000,000 in 2022, and remains at $1 million. Banks can set lower limits if they want. This is double FedNow's $500,000 default cap, making RTP somewhat more attractive for higher-value B2B use cases.
RTP vs FedNow
The two real-time rails compete head-to-head. Differences worth knowing:
- Operator: RTP is run by The Clearing House (private). FedNow is run by the Federal Reserve.
- Launch: RTP went live in November 2017. FedNow launched July 2023.
- Reach: RTP currently has broader account coverage (around 70% of US deposit accounts). FedNow is growing fast among community banks.
- Settlement: RTP uses prefunded joint accounts. FedNow settles over individual master accounts.
- Per-transaction cap: RTP $1 million. FedNow $500,000.
- Messaging: Both use ISO 20022.
For most banks and businesses, the practical answer is to support both. Routing logic at the bank determines which rail a given payment uses based on what networks the receiver is reachable on.
Common RTP Use Cases
- Insurance claim disbursements: Pay claims out instantly rather than waiting for ACH or check settlement.
- Earned wage access and on-demand pay: Workers get pay between cycles, with funds arriving immediately.
- Account-to-account transfers: Move money between accounts at different banks in real time.
- B2B invoice payment: Buyers pay suppliers instantly with rich remittance data attached.
- Real estate and high-value consumer transactions: Earnest money deposits, closing payments, large refunds.
- Loan funding: Disburse approved loans to borrower accounts immediately.
Request for Payment
RTP supports a Request for Payment (RfP) message type, which lets a biller send a request to a customer's bank with payment details and a one-click approval flow. The customer reviews and authorizes within their banking app, and the payment processes as a standard RTP credit. This is closer to the bill-pay flows seen in pay-by-bank deployments in Europe and the UK.
RfP adoption has been slower than the underlying rail. It requires both biller-side integration and bank-side support for the consumer experience, and that two-sided rollout takes time.
Fraud Considerations
Real-time finality means fraud has to be caught before the payment settles, not after. The receiver is the recovery channel of last resort. Banks have invested heavily in pre-send validation, behavior monitoring, and account verification on RTP. Authorized push payment fraud (where a fraudster tricks a customer into sending an RTP payment to the fraudster's account) is the dominant fraud pattern, and it's hard to recover from once the payment lands.
RTP and FedNow together are the foundation of real-time bank-to-bank payments in the US. For Paytia's US clients, RTP becomes interesting in pay-by-bank scenarios where the customer authorizes an instant credit transfer from their bank account to the merchant.
The credit-push model of RTP changes the merchant experience. There's no chargeback risk on RTP because there's no debit to dispute. The customer controls the payment from their banking app or through an authorized request flow. Settlement is instant, so reconciliation is faster.
For higher-value US transactions where the card interchange fee matters, look at bank payment options that route over RTP or FedNow as part of your payment mix. Talk to us about which rails your acquirer or processor supports.
Frequently Asked Questions
Can RTP debit a customer's account?
No. RTP is a credit-push network only. The sender always pushes the payment from their account to the receiver. To pull money from a customer's account in real time, you need ACH (with delay) or card. Request for Payment is the closest RTP gets, but it still requires the customer to authorize the push.
What's the RTP transaction cap?
$1 million per transaction. Banks can set lower limits at their discretion. The cap was raised from $100,000 in 2022 to support higher-value B2B and real estate use cases.
Is RTP the same as Zelle?
No, but Zelle uses RTP underneath in many cases. Zelle is a consumer-facing P2P app operated by Early Warning Services (a bank consortium). It routes payments over RTP when both sender and receiver banks are RTP participants, and over ACH otherwise.
Are RTP payments reversible?
No, not unilaterally. Once an RTP payment settles, it's final. The sender's bank can request a return from the receiver's bank if there's a problem, but the receiver has to agree. This is why pre-send fraud prevention matters so much on real-time rails.
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