Balakrishnan (Baalki)
A seasoned software expert with more than 20 years of experience in solution architecture and application development, as well as broad knowledge in digital payments
Digital Payments

Real-Time Payments – Overview  

January 1, 2024

What are RTPs? 

With real-time payments, customers and companies can easily send and receive money transfers right away from their FI accounts, day or night, seven days a week. RTP offers a platform for product innovation and signifies a new stage in the development of the US payments sector. Improved speed, security, and messaging capabilities are just a few of the features that financial institutions can use to create special offers for their corporate and retail clients. 

Real-Time Payment Characteristics 

  1. 24/7/365 :The RTP system will run on a 24/7/365 schedule, meaning users can send and receive money on the system whenever they want. 
  1. Immediate Availability : After the Sender starts the transaction, the recipients will receive the money in a matter of seconds. The Receiving FI must make the funds available right away, unless it’s required for risk management or legal compliance 
  1. Payment Certainty: Once a payment has been approved and sent to the RTP system, senders cannot withdraw or recall it. To help with FI-to-FI communication regarding the return of funds sent in error, a procedure will be in place. 
  1. Ubiquity: The RTP system will be available to the great majority of U.S. account holders and be usable by all financial institutions, irrespective of their size or type of charter. 
  1. Extensibili To support value-added products, extensive and adaptable messaging functionality will be provided. For instance, the RTP system has messaging capabilities that allow a payment request to be made via RTP directly. 
  1. Account Data Privacy: Tokens are supported by the system, which enables the encryption of Receiver account data during transmission via the RTP system. 
  1. Convenience: Using an alias or account/routing number, users of the RTP system can start payments. 
  1. Cash Flow Control: Customers will have more control over their cash flow if they can send and receive payments instantly. This is especially crucial for consumers and small businesses with limited resources. 
  1. Flexibility – The RTP system’s architecture will allow it to adjust to the ever-changing demands of the market. 
  1. Global Standards : The RTP system will remain consistent with international global compatibility to the extent it is compatible with domestic U.S. requirements 

Source : U.S. Real-Time Payments Business Playbook.