| Author: Leigh Cook, CEO

Complete Guide to Real-Time Payments

Wow, these are exciting times in the payments' industry. It's time to enroll with the new Real-Time Payment (RTP) rails offered by The Clearing House and the impending introduction of The FedNow instant payment Service, by the U.S. Federal Reserve, offer all Americans, both individual consumers and businesses, services and developing payment solutions that will change their lives forever. Although other developed countries offer Instant Payments or Immediate Payments, this guide will be substantially limited to Real-Time services and solutions offered in the United States.  We believe the course for the Real-Time Payments is broadening to ever growing - so much, that we owe Real-TimePayments.com.

Apply the following information to your business. The new 24/7/365 payments environment means you can send and receive payments any time of day and any day of the week. Instantaneous Real-time Payments are transforming the payment landscape for use cases served inefficiently with existing domestic payment infrastructures. The solutions and services are evolving in the real-time payment niche. This document is a good "first-start" in compiling data for your use. Check back from time-to-time for updates. Or, simply provide us your contact information and we'll update you as significant changes are made.

For the last several years I have watched at least two webinars weekly, attend banking conventions and participated in national programming development groups, sponsored by private industry and the U.S. Federal Reserve. Faster payment settlements are great but, Real-Time Payments will have the greatest impact on our lives and economy via technology used. Technology companies, outside the current players of MasterCard, The Clearing House and the Federal Reserve will serve-up apps and APIs enabling all types of new products and services. Imagine not ever "over drafting" your checking account again. How about aggregating all your bank accounts, with no limit on the number of banks you have deposits with and transferring money between accounts intra-bank and interbank instantly with no fees. Oh sure, you can use that same aggregated platform to pay all your bills and choose which account to pay your bills with and what type of payment to use. These types of platforms will work for both Individuals and Businesses. The GUI, Graphical User Interface and UX, User Experiences will be fundamental for the success or failure of this "new tech." Keep your eyes on Open Banking APIs, Application Programming Interfaces, through Open Bank Project, Afinis and the Financial Data Exchange FDX APIs. The FDX has the potential to be used by more FinTechs in the U.S. since the organization already has end-point connections with over 12,000 banks and credit unions.

Banks typical make money in three ways: deposits, loans and payments. Digital bill payments can be broadly divided into five phases: pre-transaction (purchase order A/P), authentication/authorization, clearing, settlement and post-transaction (ERP and accounting integration). Non-banks have increased their presence in all phases, except the settlement phase, which is still core to banks’ activity. Banks’ role may now be reduced to Depository Only. With interest rates at historical lows, banks need to find new ways of making money from payments and they are doing that by looking at value-added services to overlay on real-time payment transaction. These value-added services are known as: Digital Overlay Services. I believe Request to Pay is most exciting of the new Overlay Services, because it has the potential to eliminate invoice fraud and is a flexible instrument which makes it easier to get paid. Currently, financial institutions control who can send money, who can receive money and what the associated fees are and who pays what share. A prediction for the future: Businesses will not have to be underwritten by a merchant acquiring bank to accept payments. The Payer and Biller will interact directly through financial technology provided through Open Banking using authorized Third Party Providers. Business billers will save billions of dollars in interchange, association and other transaction fees.

Why use Real-Time payments?

When "Next-Day" or "Same-Day" payments are too slow or using Wires costing $25 are too expensive - think Instant Real-Time Payments:

  • Real-Time payments are SAFE:
    • It is safer than cash or checks in protecting users against fraud. Today Payments' platform uses transaction limits and cross-border blocks to avert money laundering. Instant RTP transactions, using bank login authorization, are the most secure method of funds transfer available.
    Real-Time payments are FREE to Receiving Party:
    • We will not charge your Recipients who accept the RTP transaction enrollment or transaction fees. Of course, you may charge your Payees a Service Fee or Customer Service Fee.
    Real-Time payments are FAST:
    • 24/7/365 access to funds anytime.
    Real-Time payments are EFFICIENT:
    • Our platform makes digital payments effortless and more efficient. We drive efficiencies and cost savings.
    Real-Time payments are EASY TO USE:
    It connects users across the globe all through one digital hub. Worried about Internet security? DON'T BE:
  • Fraud Protection: Identify, manage and prevent suspicious or potentially costly fraudulent transactions with our customizable, rules-based solutions.
  • After a transaction is processed, you'll even receive an e-mail with amount confirmation and receiver information. Plus, our payment platform gives you the ability to manually key-in transactions anywhere there's an Internet connection.

    More than Same-Day ACH:

    Our solutions for Real-Time payments don't share banking information between parties:
    • "...consumers and businesses indicated that they would rather share an e-mail address or a phone number to make/receive payments instead of sharing their bank account numbers." Page 29, Strategies Improving US Payment System
    Credit Transfer:
    • Basic multi-purpose payment message, including remittance information.
    Request for Payment:
    • Support Account-to-Account funds request and EBPP - Electronic Bill Presentment & Payment.
    Payment Acknowledgement by Receiver:
    • Message from the receiver to the sender regarding payment dispositions (e.g. invoice paid, good shipped, etc.).
    Request for Information & Response:
    • Receiver request for additional information about a payment (e.g. requesting customer account number, invoice number, or purpose of payment).
    Remittance Advice:
    • Extensive remittance detail included in the Credit Transfer message.

    Sending money with Real-Time payments is:

    • Instant - funds will be received in seconds.
    • Flexible - send or receive one-time and recurring payments.
    • Easy - it's all done online or via your mobile device, no need to visit the bank.
    • Quick - takes seconds to set use once your company is approved.
    • Secure - money goes directly into the recipient's account of choice.
    • Convenient - funds can be instantly accessed and spent.
    • Inexpensive - one of the cheapest on the market as there are no costs for the receiver.

    QuickBooks Integration INCLUDED FREE!

    Good Funds QuickBooks Processing
    • Automate Account Receivable Collection
    • One-time and Recurring Debits / Credits

    QuickBooks® Integration: We specialize in Real-Time payments in the origination of moving money electronically. Use QuickBooks accounting software and our online virtual terminal gateway software to send and receive Good Funds transactions over the internet.

    Today Accounting Logo

    Up to 40% off QuickBooks Accounting Software Products
    plus; Free Shipping!

    Our integrated QuickBooks payments for Credit Cards, ACH & Real-Time Payments is not a "Sync". Process payments directly through your QuickBooks Desktop Enterprise, Premier and Pro software. We own the QuickBooks Plug-in! Check it out.

    Real-time Payments expand the satisfaction of immediacy with instantaneous results. Workers delivering services on demand get payment on demand. Merchants get paid within seconds for instantly fulfilling customer needs. We all know that instant insurance payouts, daily payroll and real-time loan proceeds, etc. are very important to the receiver. The following sections will describe the various payment types but not the individual use cases. We will not list the 101 uses for real-time instant payments in this guide.

    Review the numerous sections and payment types below to determine which one(s) are correct for your company

    Accept and Send Real-Time payments. Keep your existing bank account at your current bank.

    Apply NOW

    Have Questions?

    Real-Time Payments (RTP) that are "Good Funds"

    - Good Funds Definition

    Our definition of Good Funds: Settled funds in a bank account, that are final and irrevocable, and usable instantly by the owner of the account.

    The Federal Reserve stated the problem succinctly in 2013: We need (sic) “A ubiquitous electronic solution(s) for making retail payments that does not require the sender to know the bank account number of the recipient (and may we add, the Biller will not know the banking information of the Payer). Confirmation of good funds will be made at the initiation of the payment. The sender and receiver will receive timely notification that the payment has been made. Funds will be debited from the payer and made available in near real time to the payee.”

    Good Funds for Real Estate

    hand shake...See our seminal white paper on Real-Time Payments vs Wires in Real Estate Transactions

    - Real-Time vs. Instant vs. Immediate Payments

    A lot of confusion exists in whether a real-time instant payment, which I discuss below with Real-Time Credit Card and Real-Time ACH processing, method is final and irrevocable, aka: Good Funds. Good Funds are immediately settled funds in a bank account that are irrevocable, intra-bank and/or interbank account-to-account (A2A) transfers and instantly usable by the owner of the account. Most Good Funds transactions are "Credit Push" versus "Debit Pull." Businesses and Consumers, because of convenience, immediacy of payment, lower costs and the informational data that accompanies the money will both turn to RTP instead of using Wires to send money.

    Instant payments are defined as electronic payment services and solutions available twenty-four (24) hours a day, seven (7) days a week, fifty-two (52), 24/7/52 and resulting in the immediate or close-to-immediate intra-bank / interbank clearing of the transaction and simultaneous debiting of the payer’s account and crediting of the payee’s account (within seconds of payment initiation) in a synchronous transaction, irrespective of the underlying payments instrument used (credit transfer, direct debit) and of the underlying clearing and settlement arrangements that make this possible. Immediate payments offer payment assurance and lower fees, compared to Credit Card and Debit Card interchange, for transactions.

    - The Clearing House Real-Time Payments

    The Clearing House Real-Time Payments

    Real-Time Payments via The Clearing House are GOOD FUNDS! The RTP® (Real-Time Payment) network, the real-time payments system from The Clearing House, is the first new core payments infrastructure in the U.S. in more than 40 years. RTP® is not Real-Time ACH. The RTP System enables Participants to initiate credit transfers, receive final and irrevocable settlement for credit transfers, and make available to Receivers funds associated with such credit transfers in real-time, 24/7/52 a year. The Clearing House is a private corporation owned by the nation's largest banks. Combined, these banks control in excess of over 60% of all bank accounts! See Banks processing RTP through TCH

    - FedNow Services Instant Payments

    Real-Time Payments via The FedNow Service by the United State Federal Reserve are GOOD FUNDS! Federal Reserve Banks will develop a new round-the-clock real-time payment and settlement service, called the FedNow ® Service, to support faster payments in the United States.

    What are FedNow Instant payments: FedNow - Federal Reserve Real-time Payments The Federal Reserve's FedNow Service will be the second system (see The Clearing House RTP) offering Real-Time Payment "Rail" that
    can reach all U.S. bank and credit union accounts and enable funds to be sent and received within seconds. The FedNow Service enables Participants to initiate credit transfers, receive final and irrevocable settlement for credit transfers, and make available to Receivers funds associated with such credit transfers in real-time, 24/7/52 a year.

    Payment Flow

    The figure below illustrates a completed payment over the FedNow Service in its simplest form. This process is designed to take place within seconds.

    FedNow Payment Flow
    1. In step 1, a sender (i.e., an individual or business) initiates a payment by sending a payment message to its financial institution through an end-user interface outside the FedNow Service. The sender’s financial institution is responsible for screening the payment according to its internal processes and requirements.
    2. In step 2, the sender’s financial institution submits a payment message to the FedNow Service.
    3. In step 3, the FedNow Service validates the payment message, for example, by verifying that the message meets message format specifications.
    4. In step 4, the FedNow Service sends the contents of the payment message to the receiver’s financial institution to seek confirmation that the receiver’s financial institution intends to accept the payment message. At this point, the receiver’s financial institution will have the opportunity to confirm or deny that it maintains the specified account.
    5. In step 5, the receiver’s financial institution sends a positive response to the FedNow Service, confirming that it intends to accept the payment message. Steps 4 and 5 are intended to reduce the number of misdirected payments and resulting exception cases that can occur in high-volume systems.
    6. In step 6, the FedNow Service debits and credits the designated master accounts of the sender’s and receiver’s financial institutions (or their correspondent financial institutions), respectively.
    7. In step 7, the FedNow Service sends a payment message forward to the receiver’s financial institution with an advice of credit and in parallel sends an acknowledgement to the sender’s financial institution, notifying it that settlement is complete.
    8. In step 8, the receiver’s financial institution credits the receiver’s account. As a term of the FedNow Service, the receiver’s financial institution must agree to make funds available to the receiver almost immediately after step 7. This crediting to the receiver’s account as well as the debiting of the sender’s account by their respective financial institutions happens outside the FedNow Service.

    FedNow is planned for launch no later than 2024. In the meantime, I recommend reviewing the "Fed's" site directly from time-to-time for updates. You can always contact us for the latest updates. For more information, review the FedNow Service product sheet (PDF)and the FedNow Service Frequently Asked Questions.

    Features & Benefits of Good Funds RTP

    FedNow & TCH Real-Time instant payments have benefits for all parties involved in financial transactions.

    • Money Transfer: Transaction limit of up to $100,000.
    • It's Fast: 24/7/365 access to funds anytime vs. several days for paper checks or ACH transfers to process.
    • It's Final: Because FedNow & TCH say so! All RTP are Final & Irrevocable.
    • Software Integration: Integrate your Management or Enterprise software with us.
    • Message Detail: Full 145 characters available using ISO 20022 XML format.
    • Online Down Payments: Don't use inconvenient and expensive Wires & Cashier's Checks.
    • Online Real-Time Reporting: Configured Dashboard with Virtual Terminal login.
    • Reduced calls / emails in the "Purchasing Chain": All parties to a "FedNow" and "TCH Real-Time payments" transaction receive text & email messaging.

    Your Choice ~ Integrate your software system with us or, send us your API and we'll integrate Real-Time Payments with YOU!
    Enroll for Real-Time Payments and keep your current bank account:

    ~ AmEx Bank
    ~ Avidia Bank
    ~ Bank of America Real-Time Payments
    ~ Mellon Bank
    ~ BB&T Bank
    ~ Capital One Bank
    ~ Charles Schwab Bank
    ~ Chase Bank
    ~ Citi Bank
    ~ Citizens Bank
    ~ Comerica Real-Time Payments
    ~ Discover Bank
    ~ E-Trade Bank
    ~ Fifth Third Bank
    ~ Goldman Sachs Bank
    ~ Huntington Bank
    ~ Key Bank Real-Time Payments
    ~ Morgan Stanley Bank
    ~ MT Bank
    ~ Northern Bank
    ~ Regions Bank
    ~ State Street Bank
    ~ SunTrust Bank
    ~ US Bank Real-Time Payments
    ~ Wells Fargo Real-Time Payments

    Real-Time Payment Service & Solution Types

    - Bill Pay

    Oh my, where should we start? Out of all the services and solutions slated for RTP, Bill Payments will be the category which sees the greatest benefits, both in speed of payment and real-time expansive messaging that will accompany the transaction.

    Today Payments will integrate with the providers of platform interfaces of “new” digital bill pay schemas. Our API can be integrated with existing treasury management systems (TMS), ERPs, commercially available accounting software and internal systems of the Billers. A key ingredient in corporate banking is the enhanced access to data. Not only can this be used to provide insight for Billers on their own efficiencies but also help banks to make quicker and more favorable credit decisions. For example, a company can store its Accounts Payable (AP) and Accounts Receivable (AR) data in its TMS and then allow access to the bank via an integrated API.

    Currently, 2 “New” Online Bill Payment systems:

    MasterCard Bill Pay Exchange BPX: B2C & B2B Your bank will soon be offering Bill Pay Exchange as their "private-label" Online Bill Pay solution. Your bank may use their own trade name for the product but, MasterCard will be running the platform. This new, Online Bank Bill Pay solution will allow Billers to offer their Customers the ability to view current and prior billing statements online in full digital presentation, choose between convenient payment methods and make one-time payments or set recurring payments. Billers will be able to offer the same solutions their Customers but, the banks will have the advantage of aggregating all the Billers via Online Bill Pay for the convenience of the Customer. Banks will finally be able to have Online Bill Pay a profit center which they have failed miserably to do so currently. Expect financial institutions to start charging Customer Service Fees for bill payments. Banks need to stop the “paper” bill to start the billing of ACH, Cards, A2A.

    MasterCard Track Business Payment Service: B2B
    Business Payment Service will take the advantages of all current systems and provide them via Online Bill Payment through the banks!  The new systems will offer speed, security, trust, full .pdf bill presentment (both present and past) one-time and recurring payments, etc. Payers will be allowed to use various forms of payment and numerous entry points into the systems, (i.e. API, CSR, Email, IVR, Kiosk, Mobile, POS, Walk-in and Web). MasterCard Track will be available to businesses around the world. Track Business Payment Service is a secure, permissioned repository of more than 210 million registered entities worldwide, the trade directory is a central component to the expanded suite of products and services. Bill Pay Exchange will offer Customers the advantage of paying with Credit Cards and Real-Time Payments. Something current bank bill pay doesn't allow. Bill Pay Exchange will offer Customers the advantage of paying with Credit Cards, ACH, A2A and Real-Time Payments.

    - Ecommerce Payments

    Real-Time payments will have a great impact on web-based Ecommerce transactions. Merchants can now ship the ordered goods with confidence of getting paid. The immediacy of deposit will now allow the merchant to ship immediately, even on weekends. A lot of work, by all involved in the payment and distribution chain is still to be done. Currently, when paying for the products in our shopping carts we are provided two options to pay: Credit Cards or Echeck (bank A2A) transfer. All shopping cart developers will have to add a new button to allow for instant payment. What this instant payment graphic will look like or the common term used to associate this payment has yet to come to market. We are all familiar with this graphic
    It will take time for a recognizable graphic or term to develop. Maybe a fintech company will develop a "Good Funds Card" or possibly banks will issue this good funds card to all bank account holders to be used similar to a debit card? I know we're tyring to keep this discussion to the U.S. market but, this RTP graphic and phrase must be discernable around the world and in all languages.

    - Fastest Payments

    Although, the terms "Instant" and "Real-Time" are used, reality is, that it's acceptable for the payment transaction to settle in less than 5 seconds. NACHA introduced Same-Day ACH with several daily settlements Monday - Friday. For a lot of transaction types and relationship of the parties involved "Same-Day" is fast enough. In the near future, payment transactions titles will "FADE" with the parties using the "Speed" of the funds as the description. I can see it now: "Do you want your money by tomorrow, today or immediately". It will be up to the payments platform to offer the choices in a frictionless, ubiquitous manner.

    - Final Payments

    We all know that Credit Card transactions come with a 6-month time period for the card holder to notify their issuing bank that a particular charge was either a mistake, incorrect, fraud or non-delivered goods or services. The title is "Chargeback". Well, the same is possible (although most persons don't know it is) with ACH debits, whether one-time or recurring. All ACH transactions must be Authorized in advance. A person may "Revoke" the debit transaction due to mistake, incorrect, fraud or non-delivered goods or services. This revocation document must be signed, under penalties of perjury by the bank account holder. Depending upon the Standard Entry Class SEC code used in the transaction, the account holder may have only 3 - 60 days to revoke the transaction.

    Gone are the days of Charge-backs and Revocations when Real-Time Good Funds Payments are used. Businesses can now exhale and not hold their breadth for 6-months waiting for improper returns.

    - Just In Time Payments

    Have you ever heard of Just-in-time (JIT) inventory system? It is a management strategy that minimizes inventory and increases efficiency. Well, because of the advantages of speed and transactional data attached to a real-time payment, retailers and manufacturers don't have to "over order" goods and suppliers don't have to wait on payments. Just-in-Time-Payments can be established on a recurring basis with integration into Enterprise Management Systems, Accounting Systems, etc. See On-Delivery Payments below.

    - Last Day Payments

    Last-Day Payments have the biggest advantages to Payers. Imagine now how easy it will be for businesses to take advantage of trade discounts in when in the time period established by their Suppliers. No more mailing a check 3-5 days before the payment is due hoping that the payment is received and processed timely.

    Individuals never have to be late on a car, rent or mortgage payment again ~ Saving billions of dollars in late fees. The 'ol days of "Mail and Pray" are gone!

    - Last Minute Payments

    I hate to admit it but most of us have experienced situations where the cable company, utility provider or other service provider has threatened late fees, termination or worse, legal action if payment is not timely. Persons will now be able to conveniently make these last-minute payments.

    Have a "Hot Stock Tip?" Don't spend $25 to wire funds or wait for your mailed check to reach your brokerage house - send your funds for instant settlement!

    - MasterCard Send

    MasterCard Send, a real-time solution, appeared in the marketplace in 2018, allowing credit-push transactions to be sent world-wide in seconds using bank accounts attached to debit cards. "Card-based push payments enable participants to send funds directly to consumers and small businesses via their payment card accounts. Receipt of funds via a payment card – typically a debit card linked to a deposit account..." see A new push for push payments, MasterCard. In my owns words: MasterCard Send is a real-time payments product that allows for cash disbursements between consumers or businesses, or from businesses to individuals. MasterCard Send is the only personal payments service that can reach virtually all U.S. debit card accounts and enable funds to be sent and received typically within seconds, both debit cards and prepaid cards are available for the transactions.  See our page Frequently Asked Questions for MasterCard Send. Here are FAQs directly from MasterCard.

    Why use MasterCard Send?

    See Brochure

    You get the flexibility to process transactions directly from your integrated software solution or manually keying them into our Virtual Terminal:

    • MasterCard Send is SAFE: It is safer than cash or checks in protecting users against fraud. The platform uses transaction limits and cross-border blocks to avert money laundering.
    • MasterCard Send has the greatest World-Wide Reach: MasterCard Send reaches virtually all U.S. consumers with:
      • MasterCard debit cards
      • non-MasterCard debit cards
      as well as banked and unbanked recipients globally.
      MasterCard Send is FAST: 24/7/365 access to funds anytime.
      MasterCard Send is EFFICIENT: The platform makes digital payments effortless and more efficient. For businesses, it can drive efficiencies and cost savings.
      MasterCard Send is EASY TO USE: It connects users with different payment networks across the globe – all through one digital hub..

      How MoneySend works

      Financial institutions offering MoneySend money transfer services engage in two transactions to accommodate the money transfer between the Sender and the Recipient: a funding transaction and a payment transaction.

      Step 1: Funding Transaction

      MasterCard provides a Funding transaction to move money from the sender (customer) to the Originating Institution (the financial institution providing the money transfer service); that transaction can be initiated through the MoneySend API.

      • The amount used to fund the transaction will be the sum of the amount to be sent to the Recipient, plus any fees charged by the Originating Institution.
      • The Sender can fund the transaction using a MasterCard card account or other branded card account that the Originating Institution accepts; from a bank account; or with cash, at the bank’s discretion.
      • The MoneySend Funding Transaction can be initiated in a number of ways, including at a bank branch, an ATM, a mobile banking Application, or a Web-based service such as an Internet banking site, at the bank’s discretion.
        • If the Sender provides a MasterCard card to fund the transaction, the transaction can be processed using a MoneySend Funding Transaction leveraging the MasterCard Worldwide Network.
        • If another funding source is used, such as the Sender’s deposit account or non-MasterCard card held at the Originating Institution, the Originating Institution may use an On-Us Transaction. (An On-Us Transaction is an intra-bank transaction to move funds from the Sender’s funding account to the Originating Institution.)

      Step 2: Payment Transaction

      The MoneySend Payment Transaction transfers funds from the Originating Institution, via the MasterCard Network, to the account identified by the Recipient at the Receiving Institution. Funds can be transferred to a consumer, credit, debit or prepaid MasterCard®, Cirrus®, or Maestro® account. The Originating and Receiving Institution must both have the ability to process MoneySend transactions.

      - Mobile Real-Time Payments

      Mobile Good Funds Processing

      Mobile Bill Pay

      Mobile bill payments, using real-time technology, will see the largest transactional share compared to all other areas of payments. Consumers will have the option of paying their Billers direct via the Request to Pay or Request for Pay (both names will be used interchangeably for digital invoicing) or logging into their bank's Online Bill Pay section and selecting Real-time Payment RTP instead of Credit Card, ACH or account-to-account transfer: See Bill Pay Exchange above.

      - On-Delivery Payments

      Finally, On-Delivery Payments will eliminate delivery personnel from collecting checks or having office staff keying-in credit card data called-in from the recipient, having it downgrade and paying higher inter-change fees. Swiping Credit Cards, in-person, is not always possible when deliveries arrive. Now, the Vendor can send the Request to Pay notice to appropriate personnel either before or when delivery is made.

      - On-Demand Payments

      No more "The check's in the mail" response from Payers. Payments made on-demand with immediate settlement bring surety to commerce. All parties benefit. Payees can mail or deliver their goods and services with confidence that the payment just received is final upon settlement in their bank account. The parties to a last-minute on-demand payment can transact business anytime now, even outside "banking hours". Keep in mind and get used to transacting business 24/7/365.

      - On-Time Payments

      On-Time payments are a basic covenant to instant real-time payments. Of course, if the Payer doesn't send RTP, the payment will be late, no system can force a payment to be made. RTP systems are built for instant deposits and settlements through electronic digital means and not having to wait on mail delivery of checks and statements. The RTP system also eliminates "late postings" on the part of the biller's accounts receivable personnel.

      - Point of Sale / Retail Payments

      I can't remember the last time I saw a person write a check while checking out. Retailers and Consumers alike don't like long check-out lines. We all appreciate the speed, and "cash-back" opportunity, that cards provide in paying for goods. Once POS systems are installed for Real-Time send capabilities, we will see Consumers using the credit-push functionality of RTP. A form of Request for Payment will be sent by the retailer to the consumer instantly. The consumer in-turn will acknowledge receipt of the request and approve the funds to be immediately debited from her bank account and sent to the retailers bank account. This entire transaction will take less than 1 minute to complete which, I believe, is totally acceptable for both parties and especially those waiting for their turn to pay for their goods. Cash-back, and other discount opportunities will still be available using a Real-Time Payment at checkout.

      - Real-Time ACH

      Not all Real-Time Payments are Good Funds. The discussion of Same-Day ACH having 2 (a third coming in 2021) settlement windows is a huge step-forward from the customary 3 business-day settlement provided by the banks for over 40 years. Although, The Clearing House, has primarily been a provider of ACH transactions, some industry people and most businesses will refer to RTP as Real-Time ACH. It makes sense, both RTP and ACH are intra-bank / interbank transfers from one depository account to another. But, I want to clear up the technical confusion: TCH providing RTP is a different "rail" than the ACH networks. Vocalink, owned by MasterCard, is the system used by The Clearing House which is not an ACH network.

      We have a "white paper" for Real-Time ACH vs. Wires. The paper was completed in April 2019.

      ACH regulations:
      ~ The NACHA Operating Rules dictate bank-to-bank rights and responsibilities for ACH payments. The ACH Network is a batch processing system in which financial institutions accumulate ACH transactions throughout the day for later batch processing. NACHA requires the use of Standard Entry Class Codes ("SEC Codes") for each transaction settled, both one-time and recurring, through the ACH. Each code identifies what type of transaction occurred to create the item. In addition to NACHA’s Operating Rules, transactions are also primarily governed pursuant to
      Regulation E and UCC 4A (as codified by each state).

      - Real-Time Credit Card Processing

      Not all Instant payments are Good Funds. Although having the feature of real-time settlement, in part, because of Debit capabilities and the inclusion of Credit Card processing, are not Final and Irrevocable. Not all Real-Time Payments are Good Funds. Real-Time Credit Card Payments and Real-Time ACH, although having the feature of instant settlement upon batching are not Final and Irrevocable. Instant Real-Time Merchant Settlement is now available from numerous processors. A "convenience" fee ranging up to 1.5% of the gross deposit is being charged to merchants. This convenience fee is charged in addtion to inter-change, association and transaction fees. A requirement to receive faster funding is to "batch out." Unless the merchant closes-out, at anytime of the day or night, and possibly multiple times during the day, the payment processor doesn't know what amount to send the merchant. Credit Card payments, like ACH, are processed and settled in batches and not individually like TCH RTP. See Final Payments above for more information.

      Credit and Debit Card regulations:
      Visa Retail Transactions
      MasterCard Transactions

      - Real-Time Invoicing

      Industry experts are predicting Request to Pay & Request for Pay will supplement and eventually replace Invoices - at least for those Payees electing RTP versus ACH or Card payment. At the very least, Accounts Receivable Invoicing software companies need to add Real-Time Payments to their payment choices available to Payers. Billers will need to configure their billing and ERP systems to send out RfP's and RtP's as a new option to accept real-time instant payments. As payments move faster, ERP and Treasury Management Systems, TMS will need to move balance and transaction information faster, as well to manage business liquidity.

      - Request For Pay

      Payment requests have been around since the first commercial transaction. But, Real-Time Payments lingo, through The Clearing House, has brought us Request for Pay, RfP®. Request for Pay is a digital overlay service. A Request for Payment is a payment-related message (ISO20022 pain.013) that is sent electronically by a Biller to their Customers. The response from a Payer / Customer is a RTP. Ease of mind: Since RfP messages contain all the relevant Biller information, they ensure the Customer-approved payment will be recorded correctly by the Biller.

      Fundamentally, a request for pay enables a payee (person, business or other account holder) to make a request for initiation by a payer (person, business or other account holder) of a payment. The main purpose of a request to pay is to:
      ~ Ensure verified payee data is provided to the payer before the payment initiation;
      ~ Provide ease of use to the payer, who has minimal data to enter for a payment;
      ~ Provide confirmation of issuance of a payment order to the payee; and
      ~ Facilitate reconciliation of the related payment both for the payee and the payer.

      Compliments of The Clearing House. See page 12 - https://www.theclearinghouse.org/innovation-center/bill-pay/-/media/32155B90D9144F66B1ECB9D26579077A.ashx

      - Request To Pay

      Mobile / Text / Email message request to pay. Works with BillPayExchange - "Request to Pay" started out as England's version of the US TCH "Request for Pay". Request to Pay and Request for Pay are now synonomous phrases. Request to Pay is a digital overlay service. It’s a messaging service that has been created to complement existing payments infrastructure and gives billers the ability to request payment for a bill rather than simply sending an invoice or a bill. 

      A Request to Pay, is also referred to as a Request for Pay. Both terms, Request to Pay and Request for Pay are generic umbrella terms for a number of scenarios in which a payee ( Biller ) takes the initiative to request a specific payment from the payer ( Customer ). The enticing feature of this communication is that it can integrate and streamline data exchanges between the payee and payer – improving the certainty, transparency and convenience of payments for corporates, retail customers and their Payment Service Providers.

      The basic idea behind Request to Pay, or R2P, is to simplify payments. With R2P, no printed invoices are sent to the customer; rather they are sent electronically via a platform directly into the customer’s online banking system, where the customer can manage his invoices. In addition to the environmental advantage, the risk of errors being inadvertently introduced by the customer when making the payment is eliminated, the distribution of the payment initiation details being done electronically and instantly.

      - Telemarketing: Inbound and Outbound

      Outbound Telemarketing has been out of favor with payment processors for years. Most processors place Telemarketers on High Risk or Prohibited status. This dis-favor is due to many reasons, confusing marketing scripts, non-authorized account debits, types of products and services being sold, undefined continuity payment plans and persons providing unscrupulous persons their banking information. Great news: Payers don't ever have to provide their credit card numbers, banking account number or other payment credentials when a real-time payment is chosen. All Payer financial remains private and never devulged to these sales rooms.

      On the other hand, Telemarketers will now find it easier to overcome product/service reputational risk or credit risk and obtain a Merchant Account, MID, using real-time payment technology. The "good players" in telemarketing won't be considered "High Risk" by payment processors. These companies should see much lower processing fees and their ability to open processing accounts expand.

      - Venmo

      Venmo is a mobile real-time payment service now owned by PayPal. Since sender's can use numerous products to fund the instant transfers, the payments are not considered Good Funds. I used it for the first time this year in paying the "team mom" for my son's little league baseball uniform. It was an easy transaction for all involved. It's now become a noun: "Just Venmo me the money," now that's broad-base acceptance. Good for you PayPal. As with other payment types, the associated fees increase with the speed in delivery of the funds. MasterCard has issued a card for Venmo members wishing such.

      - Visa Direct

      Instant Real-Time deposits are available using Visa Direct. Visa Direct is an innovative service that financial institutions, and now merchants, can offer to enable secure money transfers to millions of participating Visa cards globally, both debit cards and prepaid cards.

      Visa Direct (formerly known as Visa Money Transfer) is a payment service that lets people send money to millions of eligible Visa accounts around the world through the Original Credit Transaction (OCT). Visa Direct consumer and business Applications include:

      Money Transfer: Consumers can send funds to their Visa account or to another person’s Visa account.
      Prepaid Load: Consumers can load/reload funds to a Visa reloadable prepaid card in participating countries.
      Funds Disbursement: Merchants can disburse funds to their customers' Visa accounts.

      How it Works

      You get the flexibility to process transactions directly from your integrated software solution or manually keying them into our Virtual Terminal:

      • Consumer-to-Consumer: A consumer can send payments and transfers to another consumer’s eligible Visa card, or to his/her own Visa card. Visa Direct makes it convenient to split expenses, pay personal IOUs, send remittances, reload a prepaid card.
      • Business-to-Consumer: Merchants, government entities, or corporations can send funds to another consumer’s eligible Visa card. Visa Direct enables payments and transfers such as insurance claims, corporate and manufacturing rebates, affiliate and contractor payouts, expense reimbursements, etc.

      - Zelle

      Zelle is the banks' competitor to PayPal's Venmo. Early Warning, a company owned by major U.S. banks, developed, owns and controls the Zelle system. Consumers, and now small businesses, are using this bank enabled payment system to send and receive money "instantly". I placed "instantly" in quotation marks on purpose. Users of the system believe that the funds move instantly with real-time settlement. Such is not currently the case. Banks participating in the system communicate electronically creating debit and credit files for nightly reconciliation. The actual funds are sent via Same-Day ACH. Accordingly, even though participants receive real-time notice of the transfer, with the funds settling in batches the transferred funds are not "Good Funds". Zelle may be "later to the game" but it's processing volumes dwarf Venmo's. Like Venmo, Zelle is currently only available in the United States.

    Accept and Send Real-Time payments. Keep your existing bank account at your current bank.

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    We provide integrated Real-Time Payments into your software!

    Banks offering Real-Time Payments

    - The Clearing House Real-Time Payment Banks List

    Listing of Banks offering RTP by The Clearing House

    The Clearing House allows all U.S. Financial Institutions (FI) to participate in offering Real-Time Payments. FI's can offer "send only" or "send and receive". Because of development and operational costs most banks and credit unions will offer "send only" capabilities. The larger banks and smaller FI's, working through Third Party Service Providers, such as FiServ, ACI Worldwide, FIS, Jack Henry, etc., will provide their commercial business deposit accounts the ability to send and receive payments in real-time.

    Accept and Send Real-Time payments. Keep your existing bank account at your current bank.

    Apply NOW

    Major banks offering Real-Time Payments through The Clearing House:

    American Express Bank
    Avidia Bank
    Bank of America
    Bank of New York Mellon
    BBT Bank
    Capital One Bank
    Charles Schwab Bank
    JP Morgan Chase Bank
    Citi Group Bank
    Citizens Bank
    Comerica Bank
    Discover Financial Bank
    E-Trade Bank
    Fifth Third Bank
    Goldman Sachs Bank
    Huntington Bank
    Key Bank
    Morgan Stanley Bank
    MT Bank
    Northern Trust Bank
    PNC Bank
    Regions Bank
    State Street Bank
    SunTrust Bank
    US Bank
    Wells Fargo Bank

    List Financial Institutions Enrolled for RTP® (updated monthly) with The Clearing House

    Fees for RTP ® with The Clearing House

    - The FedNow Service Real-Time Instant Payment Banks

    Real-Time Payments via FedNow instant payment Services are GOOD FUNDS! The RTP System enables Participants to initiate credit transfers, receive final and irrevocable settlement for credit transfers, and make funds available to Receivers, associated with such credit transfers in real-time, 24/7/52 a year.

    Federal Reserve FedNow instant payment Service Frequently Asked Questions

    As of 2020, No Financial Institutions are enrolled for The FedNow Service

    As of 2020, Fees for The FedNow Service have not been issued

    {Insert picture of Leigh} by: Leigh Cook, CEO of Today Payments, Inc.
    Having worked in the payments industry over 15, Leigh has seen a lot of changes and participated in some of them directly.

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