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It’s frustrating to see transactions sit in a “pending” state after making a purchase.
“I swiped my card, what more do they need to clear the funds?”
That’s why real-time payments (RTPs) are changing how we think about account-to-account money movement between financial institutions, businesses, and consumers.
Real-time payments enable near-instant transactions, something that’s long been impossible with traditional credit, debit, or even digital payments. And this new global method of money movement is catching on fast, transacting $42 billion in the first quarter of 2024 in the US.
RTPs enable money to move instantly, something that’s long been impossible for traditional credit, debit, or even digital payments.
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Real-time payments (RTPs), or “immediate payments”, allow consumers and businesses to immediately move digital funds from their bank account and receive or access money sent to them in an instant.
In the US, instant payments began with The Clearing House’s RTP® system, which currently conducts more than 60 million transactions each quarter. Now, according to a report by ACI Worldwide and Global Data, real-time payments are projected to grow 63% annually.
Learn more about real-time payments in this 1-minute video overview from The Clearing House.
Real-time payments are part of a global pay-by-bank phenomenon. Still, every country has nuanced banking laws, regulations, and economic needs. That’s why there are a variety of country-based service providers for instant funds transfers.
Today, more than 56 nations have enabled instant payments on various payment rails. Here are some examples:
The Faster Payment System (FPS) in the United Kingdom was launched in 2008. It’s often cited as one of the first major real-time payment systems. The service facilitates real-time payments which are primarily initiated online, mobile, or via telephone banking for millions of individuals, businesses, and charities across the UK.
Launched in November, 2010 by the National Payments Corporation of India, Immediate Payment Service (IMPS) offers an instant, 24X7, bank transfer service.
In 2023, India accounted for almost half of all real-time transactions worldwide, at more than 129 billion.
RTP® from The Clearing House is a real-time payments platform that all federally insured U.S. depository institutions are eligible to use for payments innovation. With mobile technology and digital commerce driving the need for safer and faster payments in the U.S., financial institutions of all sizes are taking advantage of the RTP network’s capabilities to create or enhance digital services for their corporate and retail customers.
The Federal Reserve launched an instant payment solution called FedNow® in July 2023.
Through financial institutions participating in the FedNow Service, businesses and individuals can send and receive instant payments in real time, around the clock, every day of the year. Financial institutions and their service providers can use the service to provide innovative instant payment services to customers, and recipients will have full access to funds immediately, allowing for greater financial flexibility when making time-sensitive payments.
Real-time payments offer a host of benefits for both merchants and consumers.
Real-time payments have several impactful use cases in today’s industries. Some examples include:
Real-time payments will continue gaining popularity and functionality, they will play a particularly important role in national and global financial inclusion. Global real-time transactions are expected to hit 575 billion by 2028. RTPs will have a considerable involvement in the lives and initiatives of virtually everyone.
Some examples of applications for RTPs in the near future include:
It's only a matter of time before RTPs become the norm. There are already hundreds of participating banks in the US, and that number is growing quickly.
We’ll see much more innovation with RTPs in 2024 and beyond, especially as more banks and merchants get on board.
Aeropay's robust offering with Cross River provides merchants instant payments on the RTP® network.
With a focus on transaction compliance and state-by-state regulatory approval, Cross River and Aeropay utilize custom API integrations to seamlessly onboard operators and give end users access to instant payouts, while providing security through real-time transaction monitoring.
Aeropay's partnership with Cross River offers merchants:
To learn more about Aeropay's real-time payment offerings, schedule a demo.
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