What is Real-Time Payment?
A real-time payment (RTP) is an instantly settled, irrevocable electronic payment transmitted and cleared between banks 24 hours a day, 7 days a week, every day of the year.
Definition
A real-time payment (RTP) is an electronic payment that is transmitted and settled instantly between financial institutions, 24 hours a day, 7 days a week, 365 days a year. Unlike traditional payment methods that process in batches during business hours, RTP transactions clear in seconds. The payment is irrevocable once sent — there is no recall mechanism. The two primary RTP networks in the US are The RTP Network (operated by The Clearing House) and FedNow (operated by the Federal Reserve). Both provide the same fundamental capability: immediate, final settlement of funds.
Key Features of Real-Time Payments
Instant settlement means the recipient has immediate access to the funds — no waiting for the next business day or batch processing cycle. 24/7/365 availability means RTP works on weekends, holidays, and at midnight — there is no concept of "business hours." Request for Payment (RFP) capability allows businesses to send a payment request to a customer, who then approves and initiates the RTP from their bank. Payment certainty: senders receive immediate confirmation of delivery. Rich data capability: RTP messages can carry more remittance information than ACH, making reconciliation easier. Irrevocability: once a payment is sent, it cannot be reversed — this eliminates the risk of returned payments due to insufficient funds after the fact.
Real-Time Payments vs. Other Payment Methods
ACH and wire transfers are the main alternatives to RTP. ACH is cheaper (often free for consumers) but slower (1–3 business days) and reversible. Same-day ACH is faster but still not truly instant and costs more. Wire transfers are fast (often same-day or next-day) but expensive ($15–$50 per wire) and primarily used for large transactions. RTP fills the gap: faster than ACH, less expensive than wires, and available continuously. For businesses that need to pay contractors or suppliers quickly, RTP is increasingly the preferred method.
Benefits of Real-Time Payments for Businesses
For businesses, RTP provides several advantages. Improved cash flow certainty: you know the moment a customer's payment has cleared — no more waiting to confirm receipt. Reduced AR processing costs: fewer checks, fewer ACH returns, and faster reconciliation. Better customer experience: customers can pay instantly on their phone, anytime. Competitive differentiation: offering RTP as a payment option attracts customers who prefer it. Faster payroll and contractor payments: businesses can pay employees or contractors instantly, even on weekends. Reduced fraud risk from returned payments: irrevocable RTP eliminates the possibility of a previously-cleared payment being recalled.
How to Accept Real-Time Payments
To offer RTP as a payment method, you need a bank or payment processor that supports it. Most major US banks and credit unions now offer RTP through The RTP Network or FedNow. Payment processors like Stripe, Melio, and Cross River also support RTP for businesses. Your bank account must be RTP-enabled on both the sending and receiving sides for a transaction to work. When invoicing, you would include RTP instructions or integrate a "Pay Now" button that initiates an RTP from the customer's bank. Eonebill integrates with payment processors that support RTP, allowing your clients to pay you instantly.