What are payment rails?

For consumers, payments can be as easy as the dip of a credit card or the touch of a “Pay Now” button. The ease of these transactions belies the complex architecture that makes modern payments so fast and effortless.

When a payment is initiated online or at the point of sale, an intricate flow of information and instructions is passed between entities. This information includes customer account information, merchant identification numbers (MIDs), and instructions for financial institutions, just to name a few. The flow of this data is supported by established networks, commonly referred to as payment rails, that ensure the correct flow of funds between businesses and consumers.

Payment rails were established to transmit this information quickly and accurately, resulting in the speedy payment transactions that consumers have come to expect. What are these payment rails, and how do they work? This blog takes a closer look at three payment rails commonly used for payment transactions in America – the ACH network, card networks, and The Clearing House’s RTP® network.


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