Real-Time Payments (RTP)
Real-time payments are bank transfers that clear and settle within seconds, at any hour, and are irrevocable once the receiving bank accepts them. RTP is also the proper name of one of the two US instant networks, which is a common source of confusion.
Also called: RTP · instant payments · instant bank transfer
The phrase carries two meanings. Generically, real-time payments are bank transfers that clear and settle in seconds, at any hour, and cannot be reversed once accepted. Specifically, RTP is the name of The Clearing House’s network in the United States; FedNow is the Federal Reserve’s. Both give the customer the same experience and reach different sets of banks.
Instant, from the beneficiary’s side, means good funds immediately rather than a pending credit. That is the difference from an ACH entry, which arrives later and can still be returned. The interbank mechanics differ between the two US networks: RTP settles through a joint account its participants fund in advance, while FedNow moves value across each bank’s own account at the Federal Reserve. In both cases the credit to the beneficiary is final once the receiving bank accepts it.
Finality is the whole point and the whole risk. There is no chargeback and no return window, so an instant rail is the wrong tool for a payment the sender might later want to dispute and the right one for a disbursement already decided on. Fraud controls have to sit before release, because after release there is nothing left to stop.
In practice
In the United States, RTP and FedNow are the two instant networks, and reach on one does not imply reach on the other. On either network an accepted credit is irrevocable: recovery depends entirely on the receiving bank persuading its customer to send the money back.
Commonly confused with
| Term | How it differs |
|---|---|
| FedNow | FedNow is the Federal Reserve’s instant network; “real-time payments” is both the generic category and the name of The Clearing House’s competing network. |
| ACH | Same-day ACH is fast but still a batch product carrying return rights; a real-time payment is final the moment it is accepted. |
See also
- FedNowFedNow is the Federal Reserve’s instant payment service, launched in 2023. A payment sent over it clears and settles in central bank money in the same moment, so the beneficiary’s bank has final funds within seconds of accepting the instruction.
- ACHACH is the batch system for domestic bank-to-bank debits and credits in the United States. Payments are grouped into files, exchanged between banks and settled on a processing schedule rather than one at a time, which makes ACH cheap, slower than a wire, and reversible within defined return windows.
- RTGSRTGS stands for real-time gross settlement: a system that settles each payment individually and finally in central bank money, rather than offsetting many payments against each other and settling only the difference at the end of a cycle.
- Payment RailA payment rail is the underlying network a payment travels over: ACH or Fedwire in the United States, SEPA in the euro area, a card scheme, a domestic instant scheme, or a blockchain. The rail chosen decides what the payment can and cannot do.
- SettlementSettlement is the point at which value actually moves between parties and the obligation between them is discharged. It is a separate step from clearing, which only works out who owes what, and from finality, which is the moment the transfer can no longer be reversed.