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Real-Time Payments

TL;DR
  • RTP (The Clearing House): $10M limit, 675+ institutions, 343M transactions in 2024
  • FedNow (Federal Reserve): $500K limit (→$1M in 2025), 1,200+ institutions, newer/smaller volume
  • Both are instant, irrevocable, 24/7/365 - no chargebacks, but no recall either
  • Push-to-card (Visa Direct/Mastercard Send): Instant payouts to debit cards, 0.5-1.5% cost
  • Great for payouts (gig workers, insurance claims); risky for pay-ins (social engineering fraud)

The US now has two real-time payment networks: RTP (operated by The Clearing House, launched 2017) and FedNow (operated by the Federal Reserve, launched July 2023).

What Makes Them "Real-Time"​

Unlike ACH (batch settlement) or cards (real-time auth, batch settlement), real-time payments settle instantly. Money moves from sender's account to receiver's account in seconds, 24/7/365.

Key characteristics:

  • Settlement in seconds (guaranteed under 20 seconds for FedNow)
  • 24/7/365 availability (no weekends, no holidays)
  • Irrevocable once settled (no chargebacks, no reversals)
  • Push-only (sender initiates; no pulling money from accounts)

RTP vs FedNow​

FeatureRTPFedNow
OperatorThe Clearing House (bank consortium)Federal Reserve
Launched2017July 2023
Transaction Limit$10 million$500,000 (increasing to $1M in 2025)
Participating FIs~675+~1,200+
2024 Volume343 million transactions1.5 million transactions
2024 Value$246 billion$38.2 billion
Average Transaction$719~$22,000

Why Two Networks?​

The Clearing House is owned by large banks. Smaller banks and credit unions were concerned about relying on a competitor's infrastructure. FedNow provides an alternative backed by the Federal Reserve, with potentially broader reach.

Current State (2025)​

58% of US financial institutions that enable instant payments use both networks. This "multi-rail" approach is becoming standard. RTP has more transaction volume; FedNow has more registered institutions (though many aren't yet actively processing).

Use Cases​

Real-time payments excel for:

Emergency disbursements: Insurance claims, gig worker payouts, emergency loans. When someone needs money now, not in 2-3 days.

Account-to-account transfers: Moving money between your own accounts at different banks, instantly.

Bill pay at the last minute: Pay a bill due today, know it's settled today.

B2B urgent payments: Supplier needs payment before releasing shipment.

Payroll funding: Fund payroll accounts same-day rather than pre-funding days in advance.

Costs​

Real-time payments typically cost:

  • $0.01-$0.05 per transaction for high-volume senders
  • Comparable to or slightly higher than ACH for occasional use

The economics are attractive for urgent payments. If you'd otherwise wire money ($25-$40), real-time payments at $0.05 are a massive savings.

The Irrevocability Problem​

Real-time payments are irrevocable. Once settled, there's no chargeback mechanism, no recall process (unless the receiver voluntarily returns funds).

This is a feature for merchants (no chargebacks!) but creates fraud risk. If a fraudster tricks you into sending a real-time payment, that money is gone. Business email compromise attacks increasingly target real-time payment rails because the money moves before anyone realizes the fraud.

From the issuer side, we're watching this carefully. The speed of real-time payments compresses the fraud detection window. With ACH, you might have hours or days to flag a suspicious transaction. With RTP/FedNow, you have seconds.

Global Real-Time Systems​

RTP and FedNow aren't unique. Most developed economies now have real-time payment infrastructure:

Country/RegionSystemKey Characteristics
UKFaster Payments (FPS)Launched 2008, £1M limit, 24/7
EUSEPA Instant Credit Transfer10-second max, €100,000 limit, growing adoption
BrazilPIXCentral bank-run, near-zero cost, massive adoption
IndiaUPI7+ billion monthly transactions, near-zero MDR
SingaporePayNowLinks to phone numbers, 24/7
AustraliaNPP/PayIDReal-time with addressing via phone/email
MexicoSPEISame-day, moving toward instant

Common Characteristics Across Systems​

  • Push-only (sender initiates)
  • 24/7/365 availability
  • Settlement in seconds
  • Mostly irrevocable (very limited recall mechanisms)
  • ISO 20022 messaging standard (increasingly)

Why this matters: If you operate globally, real-time payments are available in most major markets. The patterns are similar: instant, final, push-based. The specific rails and limits differ, but the use cases (urgent disbursements, B2B payments, bill pay) translate across borders.

Instant Card Payouts (Visa Direct / Mastercard Send)​

There's another instant payout option often overlooked: pushing money to debit cards. Instead of using card rails to pull money from customers (normal card acceptance), you can push money to their cards.

How Push-to-Card Works​

Visa Direct and Mastercard Send are Original Credit Transactions (OCTs): credits pushed to a card number without a corresponding debit.

The flow:

  1. You collect recipient's debit card number
  2. You initiate a push transaction through your processor
  3. Transaction routes through Visa/Mastercard network
  4. Funds appear on recipient's card (usually within 30 minutes, often faster)
  5. Recipient can access funds immediately (spend on card, ATM withdrawal if debit)

Rails: Card networks (Visa, Mastercard), but using push (credit) instead of pull (debit).

Economics​

  • Cost: Typically 0.5-1.5% of payout amount
  • Per-transaction cap: Usually $10,000-$25,000 per transaction (varies by processor and card network)
  • Daily limits may apply

Comparison to Other Payout Methods​

MethodSpeedCostRecipient Experience
ACH1-2 days$0.20-$1.00Slow but free
Same Day ACHSame day$0.50-$2.50Better, still not instant
RTP/FedNowSeconds$0.01-$0.50Instant, requires bank enrollment
Push-to-CardMinutes0.5-1.5%Instant, works with any debit card
WireSame day$25-$40Fast, expensive

Use Cases​

Gig worker payouts: Driver completes a ride; earnings available on their debit card in minutes. Major differentiator for platforms competing for supply.

Marketplace seller payouts: Seller makes a sale; funds available same day rather than waiting for ACH.

Insurance disbursements: Claim approved; funds pushed to policyholder's card instantly.

Earned wage access: Employee wants access to earned wages before payday; push to their card.

Refunds: Customer returns item; refund appears instantly rather than 3-5 business day "credit to your card."

Gaming/gambling payouts: Winner cashes out; funds available immediately.

Fraud Profile​

Push-to-card fraud is different from card acceptance fraud:

  • Primary risk: Account takeover / misdirected payouts: Fraudster gains access to your platform, changes payout card, and drains funds. This is the #1 concern.
  • Secondary: Synthetic identity: Fake worker/seller accounts created to receive fraudulent payouts.
  • Not a concern: Stolen card numbers: Unlike card acceptance, the cardholder receives money rather than pays. Stolen card numbers aren't useful for receiving funds.

Mitigation:

  • Strong KYC on payout recipients
  • ATO controls (device binding, step-up authentication for payout changes)
  • Velocity limits on new accounts
  • Confirmation of payee (is this card actually owned by this person?)

Operational Considerations​

Card eligibility: Not all cards can receive push payments. Visa Direct Fast Funds and Mastercard Send work with most US debit cards, but some credit cards and prepaid cards may not be eligible. Your processor provides card eligibility checking.

Cross-border: Push-to-card works internationally but with additional complexity (FX, country restrictions, card network rules).

Fallback: Build ACH or other payout methods as fallback for cards that don't support push payments.

The UX advantage: "Get paid instantly to your debit card" is a powerful value proposition for gig workers, sellers, and anyone expecting a payout. The 0.5-1.5% cost is often worth it for the conversion/retention benefit.

See Also​