What is RTP?

RTP (Real-Time Payments) is a US instant payment network operated by The Clearing House that settles bank-to-bank transfers in seconds, available 24/7 year-round. Launched in November 2017, RTP was the first new payment rail in the US in 40 years.

The RTP network handles diverse payment scenarios:

• Instant payroll disbursements and on-demand wage access
• Real-time business-to-business supplier payments
• Insurance claim settlements and emergency loan disbursements
• Merchant settlement for same-day revenue access
• Real estate closings and title insurance payments
• Person-to-person transfers with immediate availability

Any federally insured US depository institution can join the RTP network regardless of size. The network now averages over 1 million payments daily, with 42% of transactions occurring overnight, on weekends, or holidays.

How RTP payments work

An RTP payment begins when the sender initiates a transfer through their bank's interface. The sender provides the recipient's account details, amount, and optional remittance information.

The sending bank validates the payment and submits a message to The Clearing House RTP network using the ISO 20022 messaging standard. This standard supports rich payment data including invoices, purchase orders, and fulfillment details within the secure interbank network.

The RTP network processes the message and routes it instantly to the receiving bank. The receiving bank validates the recipient's account and credits the funds immediately. Both banks receive instant confirmation that the payment completed successfully.

Settlement occurs in real time through The Clearing House's infrastructure. Unlike ACH's batch processing, each RTP transaction settles individually within seconds. The payment is final and irrevocable - once confirmed, it cannot be reversed or recalled.

RTP processing times and costs

RTP delivers instant settlement with transparent, low-cost pricing.

Processing times:

• Settlement: Funds transfer in seconds, typically under 20 seconds
• Availability: 24/7/365 including weekends and holidays
• Confirmation: Immediate notification to both sender and recipient
• No batch windows or cut-off times like ACH or wire transfers

Transaction costs:

• Credit transfer fee: $0.045 per transaction (same for all participants)
• Request for Payment fee: $0.01 per message
• Receiving payments: No fee
• No joining fees, monthly minimums, or volume requirements
• Banks negotiate their own fees with corporate customers, typically ranging from $0.01 to $2.00

The RTP network uses flat pricing with no volume discounts, ensuring financial institutions of all sizes pay the same rates.

RTP transaction limits

The individual transaction limit increased to $10 million on February 9, 2025, up from the previous $1 million cap. This tenfold increase enables higher-value business transactions including real estate settlements, large B2B payments, and corporate treasury operations.

Previous limit history:

• November 2017 launch: $25,000 limit
• April 2022: Increased to $1 million from $100,000
• February 2025: Current $10 million limit

The higher limit addresses customer demand for instant payments on larger transactions that previously required wire transfers or delayed ACH batches. Banks can configure their own sending limits within the network maximum based on risk tolerance and customer profiles.

RTP vs ACH vs wire transfers

RTP competes with established payment rails but offers distinct advantages for time-sensitive transfers.

RTP vs ACH: ACH processes transfers in batches taking 1-2 business days for standard settlement. Same-day ACH offers faster processing but still requires several hours. RTP settles in seconds with 24/7 availability. However, ACH costs less at $0.05-$5 per transaction and has broader coverage - all US banks support ACH while RTP reaches approximately 70% of US demand deposit accounts.

RTP vs wire transfers: Wire transfers cost $15-$50 per transaction and can take several hours. RTP costs under $2 and settles in seconds. Wire transfers support larger amounts and international transfers, while RTP is domestic-only. Both provide irrevocable payments, but RTP includes rich ISO 20022 messaging for detailed remittance data.

RTP limitations: RTP only supports credit (push) payments, not debits. Payments cannot be reversed once confirmed. The Request for Payment feature enables invoice-style functionality but differs from ACH's automatic debit capability.

Common RTP use cases

RTP's instant settlement opens new possibilities across payment scenarios. Here's how businesses and consumers use the network:

• On-demand wage access: Gig economy workers and hourly employees receive instant payment after completing shifts. Drivers can select "get paid now" and access earnings immediately rather than waiting for weekly payroll cycles.
• Emergency disbursements: Lenders approve and disburse small loans in seconds for urgent expenses like car repairs. Insurance companies settle claims immediately, eliminating multi-day waiting periods.
• Supplier payments: Manufacturers pay vendors instantly upon delivery, enabling just-in-time inventory management. The 24/7 availability means payments process outside business hours when traditional systems are offline.
• Real estate closings: Commercial and residential property transactions settle instantly with the $10 million limit. Title insurance payments process on weekends and evenings, removing timing constraints from closings.
• Merchant settlement: Large retailers receive daily instant payments instead of waiting 1-2 days for batch settlement. Immediate revenue access improves cash flow management and working capital optimization.
• Cash concentration: Businesses move funds between accounts instantly for month-end or quarter-end consolidation. Treasury operations benefit from real-time liquidity management across multiple entities.

Request for Payment (RFP)

The RTP network includes a Request for Payment feature that enables billers to send electronic invoices through the same secure channel. Unlike ACH debits that automatically pull funds, RFPs function as payment requests that recipients can approve or decline.

A utility company sends an RFP to a customer's bank with the bill amount and details. The customer receives notification through their banking app, reviews the request, and approves payment. The approved payment then processes instantly through RTP's credit transfer system.

RFPs cost $0.01 per message and support rich ISO 20022 data including invoice numbers, due dates, and line-item details. This creates a debit-equivalent functionality while maintaining RTP's push-payment security model.

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