Since October 2020, The Clearing House has focused on expanding real-time payment adoption, providing financial institutions with tools to connect to instant payment systems like the RTP® network and the FedNow® Service. These networks offer distinct benefits and opportunities for credit unions to meet the evolving needs and expectations of their members. Below, we take a closer look at the RTP network and its role in modernizing payments.
Understanding the RTP® network
Launched in 2017 by The Clearing House, the RTP network is the first new U.S. payments infrastructure in 50 years. It provides 24/7 real-time domestic payment capabilities, immediate settlement, and modernized payment options for credit unions. The RTP network is currently supported by over 200 credit unions (655 financial institutions total) with a 70% account base reach.
Real-time payments through the RTP network offer credit unions a transformative opportunity to enhance member experiences and operational efficiency. With the ability to settle transactions instantly, the RTP network empowers credit unions to provide immediate access to funds for payroll, loan disbursements, and person-to-person (P2P) payments.
Key features include:
- High transaction limit: RTP allows payments of up to $1,000,000—recently raised from $25,000.
- Cost-effective payments: The cost to send a payment is $0.045, and a Request for Payment (RfP) costs $0.11.
- Innovative tools: Features like tokenization for secure payments and partnerships such as Zelle integration provide advanced functionalities for end-users.
The RTP network’s features, such as high transaction limits (up to $1 million), robust security measures like tokenization, and rich data capabilities, enable credit unions to address diverse payment needs while maintaining cost efficiency.
Staffing for real-time payments
RTP operates 24/7/365, minimizing downtime and enabling real-time settlement every day of the year. Despite these continuous operations, most credit unions will not require additional staffing due to the automated and rule-based nature of these systems. However, having on-call support for troubleshooting remains advisable.
Real-time payments in action
The RTP network enables a wide range of use cases, including payroll, business-to-business (B2B) payments, and merchant settlements. For example, RTP facilitates earned wage access and same-day payroll services. This enhances member satisfaction and strengthens the credit union’s role as a trusted financial partner for both individuals and businesses.
For more information about RTP, please go to Alacriti’s RTP Network guide, which answers common questions such as ‘What is the RTP network?’, and ‘What’s the difference between the RTP network and the FedNow Service?’
