Real-time payments gives your business immediate access to funds

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Real-Time Payments (RTP®) not only delivers funds within seconds but also provides abundantly more information, and more flexibility, than any other payment method. Read how Real-Time Payments could help you optimize your cash flow and improve your account reconciliation process.

Businesses can transfer cash any number of ways, but most take days, sometimes weeks, to clear into a bank account. Enter Real-Time Payments. This new payment method not only delivers funds within seconds but also provides abundantly more information, and more flexibility, than any other payment method.

"Real-Time Payments is the first new payment rail coming to banking in more than 40 years. With Real-Time Payments, a business can make transfers 24 hours a day, 365 days a year. The payment reaches the payee’s bank in about 15 seconds and can be immediately accessed."

Pat Alcox
Treasury Management Product Director, Huntington Bank

With Real-Time Payments, money can move in and out of a company’s accounts around the clock, uncoupling transactions from traditional banking hours. That can help small businesses and independent contractors get paid faster. For example, rideshare drivers, who typically get paid every week, can get paid every day, or even every ride, using Real-Time Payments. Service people can accept immediate payment through their phones, and insurance companies can issue payments to clients instantaneously.

Companies large and small can benefit from knowing exact time and day the payment will be made.

In another use case, “If a customer is involved in an accident, he can send a photo of the damage to an adjuster, who can assess the damage, estimate the cost of repairs, and make an immediate payment,” Alcox says. “The user experience is incredible when that kind of capability is enabled, because not only is there an immediate payment, but there is messaging, and all the information is embedded in the payment.”

And that’s another benefit of Real-Time Payments: It provides a rich trove of data with each transaction.

Payments made with a debit or credit card include very limited information on statements about that transaction. And traditional billing methods, those in which a business issues a paper invoice, mails it, and waits for payment, can lead to delays if there is a problem with the invoice amount. The business must first discuss the issue in a phone call or over several emails, then reissue and resend the invoice, only to be left waiting again for payment to arrive.

With Real-Time Payments, a business can send an immediate request for payment, and if there’s an error, it can correct the invoice on the spot through real-time messaging and receive payment. All of these transactions still flow between banks, creating a very high level of fraud detection and security. And because all of the associated data can be downloaded, a business’s transaction history becomes more transparent.

“All of that data is stored with the payments, making it simpler to reconcile your books,” says Alcox. “Real-Time Payments makes that back and forth so much more efficient, and that efficiency will only increase as this product continues to mature. With the seamless transparency of the data, businesses will spend far less time trying to reconcile payments, allowing them to focus more on revenue generation and less on back-office tasks.”

Alcox says over the next several months, more banks will begin offering Real-Time Payments to clients. Companies should discuss this new payment rail with their bank and their clients, as it can have a significant impact on cash flow.

“Start having discussions internally about Real-Time Payments, and then talk to your banker about how real-time cash availability can positively impact your business,” says Alcox. “Start to imagine a future in which payments are fast and come with great data and messaging capabilities. There are endless possibilities. How your business leverages this can be a gamechanger.”

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RTP® is a registered service mark of The Clearing House Payments Company L.L.C.

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