Real-Time Payments in the USA: Preparing Your Business for Instant Transactions    

Real-time payments (RTP) or Instant payments are revolutionizing the way money is transferred between businesses and consumers in the U.S. In traditional systems, such as ACH or credit card networks, transactions can take hours or days to settle and are typically processed only during business hours. By contrast, RTP rails such as The Clearing House’s RTP Network and the Federal Reserve’s new FedNow Service settle in seconds, 24 hours a day, 365 days a year.

This means that when a customer pays a business via RTP or FedNow, the funds appear in the business’s account almost immediately (subject to processing and verification), rather than waiting 1–3 business days, as is typically the case with most ACH transfers. RTP transactions are also final and irrevocable – once sent, funds cannot be recalled by the sender, providing both the payer and payee with certainty that the transfer has been completed immediately.

What Are Real-Time Payments?

 

Real-time payments are bank-to-bank transfers that clear and settle in seconds, rather than in batch cycles. In the U.S., the two central instant payment systems are The Clearing House’s RTP® Network (launched in 2017) and the Federal Reserve’s FedNow Service (launched in July 2023). These systems enable customers to send money from their account to another account and have it arrive immediately, at any time of day or night. Both run 24/7/365 – unlike ACH or FedWire – so payments can be sent on weekends, holidays, or after business hours, and recipients see the funds in their account within seconds.

For example, The Clearing House’s RTP Network (a private-sector rail) reaches over 950 bank and credit union participants (covering about 71% of U.S. deposit accounts). It handles millions of instant transactions per day. FedNow (the Fed’s rail) similarly allows any bank with a Federal Reserve master account to send/receive instant credit transfers.

Both use modern ISO 20022 messaging and rich data, making them more flexible than legacy rails. In practice, RTP and FedNow transactions work like a credit card push: the sender (payer) initiates a transfer from their bank, and the funds are pushed to the recipient’s bank in real-time. Because the payer’s bank confirms funds and authorizes the transfer in advance, it completes with finality in seconds.

This is quite different from older rails. The ACH (Automated Clearing House) processes transactions in batches, so payments are often cleared in 1–3 days (though Same-Day ACH, introduced in 2016, has improved speed to same-day). Credit/debit card networks also rely on intermediaries and can involve a day or more for settlement, plus interchange fees and chargeback exposure. By contrast, RTP/FedNow gives payers and payees immediate visibility and access to funds. In other words, real-time, around-the-clock payments can’t be undone once sent.

Benefits of Instant Payments for Businesses

 

For businesses and merchants, the main appeal of real-time payments is cash flow and certainty. With traditional methods, a vendor might ship goods and then wait days for payment, or a worker might have to wait until payday via ACH. Instant payments eliminate that delay. Instead of waiting 2–3 days for an invoice to clear, a supplier can receive funds in seconds and use them the same day. A retailer can have a customer’s payment land in its account instantly at checkout, rather than tying up cash in accounts receivable.

This improves cash forecasting and reduces overdraft risk. Faster payments can optimize liquidity management and cash flow forecasting for businesses, allowing them to plan expenses or reinvest funds without delay.

Instant payments also reduce uncertainty and costs. When a payment is final in seconds, there’s no ambiguity about whether money has cleared. This cuts the administrative overhead of confirming deposits or chasing late payments. Additionally, because RTP/FedNow transfers are direct bank-to-bank transfers, they can avoid some fees associated with credit cards. (For context, one analysis found that a typical credit card fee is ~2.24% of a $50 purchase, whereas an ACH transfer averages only $0.11. RTP rails often charge fixed, low fees or are absorbed by the bank, making them cheaper than card processing.)

Unlike card transactions, the sender cannot reverse real-time payments – there are no chargebacks. This finality eliminates the waiting period associated with traditional methods, such as ACH or credit card settlements, and ensures merchants know exactly when funds will be available. Beyond internal finance, real-time rails can improve customer experience. Faster payout of refunds or rewards builds loyalty. For example, studies cited in industry reports show that the vast majority of workers and consumers prefer instantaneous payouts (such as refunds, gig earnings, and lottery winnings) – often at rates of preference above 65%–80%. In other words, allowing instant invoice payments or immediate reimbursements can make customers happier and more likely to stick around.

Gig and delivery platforms, for instance, can pay drivers instantly after a job is completed; online merchants can credit returns to customers immediately; and software companies can apply subscription payments in real-time.

What Banks Offer RTP in the USA?

Most major U.S. banks have adopted or are in the process of adopting instant payment rails. On the Clearing House’s RTP Network side, the network now has over 950 financial institutions (banks and credit unions) participating. On the Federal Reserve’s side, FedNow is growing rapidly: as of early 2024, roughly 470 banks and credit unions had joined FedNow, and this number keeps rising. In practice, this means many familiar banks support instant transfers. Here are some examples:

• Capital One,
• Bank of America,
• JPMorgan Chase,
• Citibank,
• PNC Bank,
• Goldman Sachs Bank,
• Truist Bank,
• TD Bank,
• U.S. Bank,
• Wells Fargo.

These are among the large institutions that are RTP- or FedNow-enabled. Many regional banks and credit unions are also on board (FedNow’s participants include hundreds of community banks).If you’re a merchant, you’ll want to check whether your bank (or your customers’ banks) are on these rails. Both The Clearing House and the Federal Reserve publish updated directories of participants.

For example, Clearing House lists all RTP-participating banks on its site, and the Fed maintains a list of FedNow-serviced institutions. In practice, however, many small businesses access RTP/FedNow through their payment processor or merchant acquirer rather than directly through the bank. Many third-party payment providers (such as Dwolla, Stripe, or PayFi by ACI Worldwide) now offer instant payment services that tap into RTP or FedNow behind the scenes.

How Do RTP Payments Compare to Other Payment Rails?

Compared to legacy rails, RTP/FedNow stand out in a few key ways:

• Speed:

Real-time rails settle in seconds, whereas ACH transactions still take days to clear. (ACH might be same-day now, but not truly instant.) Credit and debit card transactions are initiated instantly by the consumer, but merchants often wait 1–2 days for settlement.

In contrast, an RTP transfers posts immediately to the recipient’s account, any time, day or night.

• Availability:

RTP and FedNow run around the clock (24/7/365). Traditional ACH and Fedwire settle only on business days. This means RTP can move money on weekends and holidays when other rails are offline.

• Finality:

RTP/FedNow payments are final and irrevocable once sent. ACH payments can sometimes be returned or reversed days later under limited conditions, and credit cards permit chargebacks. Instant rails give the recipient certainty that the money is theirs.

FedNow (like RTP) cannot be reversed by the sender, unlike ACH or credit card payments.

• Push vs Pull:

ACH supports both push (credit) and pull (debit) transactions, while RTP/FedNow today allows credit-push only (the sender pushes funds). In other words, RTP transfers are always initiated by the payer and cannot be used for merchant-initiated debits (unless done via a separate bill-pay request).

This is a structural difference: RTP rails are designed as “credit push,” so funds move out of the sender’s account rather than being drawn out by the payee. (In contrast, a credit card or ACH debit is effectively a pull transaction.) This means businesses cannot automatically pull subscription payments via RTP, but they can use a “Request for Payment” workflow to request customer approval for transfers.

• Cost:

The cost structure is different. For example, card networks typically charge merchants ~2–3% per transaction, whereas banks usually charge flat per-transaction fees for ACH or RTP. The Clearing House’s RTP Network uses a single flat fee (no monthly minimums or volume tiers).

ACH fees are very low on a per-transaction basis (studies cite around $0.11 for a $50 payment), and RTP networks often fall within that range. Overall, instant rails can be far cheaper than card processing.

• Data Richness:

Modern instant rails use ISO 20022 messaging, which supports extensive remittance data (invoice numbers, merchant details, line items, etc.) within the payment. This surpasses the limited data available in ACH or card transactions, enabling businesses to automate reconciliation.

RTP Credit vs Debit  –  What’s the Difference?

It’s essential to note that current RTP and FedNow transfers are credit-push only – there’s no built-in “debit” or pull mechanism. In practice, this means that a customer must initiate and authorize each payment from their bank account, rather than the merchant pulling funds from the customer’s account. The RTP Network is “strictly ‘credit push,’ meaning that the person making the payment instructs its financial institution to make the payment.

Likewise, RTP transactions are credit-only transfers, meaning they can be used to send funds but not debit or pull funds from someone else’s account. In other words, neither FedNow nor RTP supports merchant-initiated debits, such as ACH debits or recurring charges. This contrasts with ACH or card networks, which do support pull transactions.

For example, merchants can pull subscription fees via ACH debit or charge a credit card on file. With instant rails, recurring charges require a different model. In practice, merchants use features like Request for Payment (RfP) or paid invoices: the merchant sends a payment request to the customer (via banking app notification or email), and the customer then authorizes the push transfer. Both RTP and FedNow have introduced RfP standards to enable this workflow.

But absent such a request, each real-time payment must be sent (pushed) by the payer. The upside is that, because the payer explicitly sends the funds, the payment is guaranteed once made and cannot be stopped or later charged back.

How to Get Started with Real-Time Payments

Merchants and businesses interested in using instant payments should take a few key steps:

1. Check with your bank or payment provider

First, find out whether your bank (or merchant acquirer) participates in RTP/FedNow. You can consult the lists of FedNow and RTP participants (e.g., the FedNow site and The Clearing House directory) or ask your bank for more information. If your bank is on board, they can typically add instant transfer options to your account or gateways. If not, ask if they have plans to join.

Merchants should assess their current payment solutions to determine how FedNow can enhance their operations and reach out to their financial institutions or payment acquirers to decide whether they are part of the FedNow network and what features they plan to support. In other words, work with your existing providers to enable the new rails.

2. Work with fintech/payment platforms

Even if your bank doesn’t directly support RTP yet, many third-party vendors do. Payment platforms like Stripe, Square, Dwolla, Plaid, and others have introduced RTP, or “Pay by Bank,” products. These let online merchants add an option like “instant bank transfer” at checkout. Under the hood, these platforms connect to the RTP and FedNow networks on behalf of the merchant and customer.

Integrating such an API or plug-in is often as simple as enabling a new payment method in your e-commerce or billing system. Similarly, payroll or invoicing software providers may add instant pay features; check if your software has an RTP upgrade or add-on.

3. Update your checkout or POS options

To collect real-time payments, you may need to modify your payment processing methods. For online sales or invoices, consider adding a “Pay by Bank” or “Real-Time ACH” option alongside credit cards. This typically involves embedding a bank login or verification step (via a banking API, such as Plaid, or a portal provided by the bank) so that the payer can authorize the transfer.

For in-person sales, some payment terminals are now supporting instant bank apps or QR-code-based bank transfers. In any case, you should provide clear instructions to customers, such as: “Choose instant ACH payment and approve the transfer in your banking app.” The Federal Reserve even discusses “Pay-by-Bank” use cases and fees in its merchant FAQs.

4. Train staff and tighten security

Adopting real-time payments isn’t just a technical change; it’s a procedural one. Staff handling payments should be trained on the new workflows and aware that once a payment is made, it’s final. Ensure your accounting or billing team is familiar with reconciling instant payments and handling customer service inquiries.

Crucially, update your fraud prevention measures: since RTP/FedNow transfers cannot be reversed, you must have robust measures in place upfront. Banks and networks build in tools, such as FedNow, which supports risk-based transaction limits, “negative lists” (blocking known fraudulent accounts), and real-time monitoring. You should similarly monitor incoming payments and use tokenization or verification (e.g., confirming account ownership) to prevent unauthorized transfers.

5. Pilot a use case

A good way to start is to pilot one application of instant payments. For instance, you might allow a key supplier to pay you via RTP and observe how the funds are deposited into your account, or enable instant payout of gift cards or rebates to customers.

Alternatively, try using the Request-for-Payment function for an invoice, so that customers receive a real-time payment request and approve it in their bank app. Testing these features on a small scale helps smooth out any operational kinks.

RTP Payment Use Cases

Real-time payments open up many practical use cases across industries. In consumer services, instant transfers are ideal for on-demand payouts and refunds. For example, rideshare or delivery companies can pay drivers and couriers immediately after a drop-off. Retailers can refund returns instantly. Gig economy platforms and earned-wage apps already use RTP to advance daily wages or tip payouts; many gig workers prefer having cash immediately rather than waiting for weekly payroll. Data show that over 80% of gig workers and even lottery holders prefer instant transfers to delayed ones.

In business-to-business settings, RTP and FedNow can streamline vendor and supplier payments. A wholesaler could pay multiple vendors in real-time on a Monday morning, rather than scheduling checks for the following Friday. Companies can use real-time transfers to fund payroll or contractor invoices on short notice. This mimics the convenience of a corporate credit card without merchant fees. Other common uses include account-to-account (A2A) transfers, where customers can move money between their checking and savings accounts or brokerage accounts, benefiting from instant posting.

Digital wallets also often “top up” from bank accounts via RTP. Specific vertical use cases include real estate closing payments (instant transfer of down payments or title fees), insurance claim payouts, earned wage access (payroll advances), and consumer loan disbursements. On the FedNow side, early adopters have similarly focused on P2P, wallet funding, and urgent B2C payments, such as tax refunds or emergency relief.

Conclusion

Real-time payments are no longer a future innovation – they are a present-day reality reshaping the way money moves in the U.S. For businesses, adopting RTP and FedNow isn’t just about faster payments; it’s about unlocking operational efficiency, improving cash flow, reducing costs, and delivering the speed and certainty that today’s customers and partners increasingly expect.

Whether you’re a small retailer, a large enterprise, or a platform serving gig workers, integrating real-time payment capabilities can give you a competitive edge. The technology is already here, the infrastructure is growing rapidly, and customer demand is strong. By taking proactive steps – working with banks or fintech providers, updating your systems, and piloting practical use cases – your business can position itself to thrive in a payment landscape where “instant” becomes the new normal.