Real-Time Payments gives your business immediate access to funds

Read Time: 4 Min
Real-Time Payments not only delivers funds within seconds but also provides abundantly more information, and more flexibility, than any other payment method. Read how RTP® could help you optimize your cash flow and improve your account reconciliation process.
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Businesses can transfer cash any number of ways, but most take days, sometimes weeks, to clear into a bank account. Enter Real-Time Payments (RTP®). 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,” says David Swart, Treasury Management product director at Huntington. “With RTP®, 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.”

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 RTP®. 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,” Swart 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 RTP®: 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 RTP®, 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 Swart. “RTP® 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.”

Swart says over the next several months, more banks will begin offering RTP® 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 RTP®, and then talk to your banker about how real-time cash availability can positively impact your business,” says Swart. “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.

The information provided in this document is intended solely for general informational purposes and is provided with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering financial, legal, technical or other professional advice or services, or endorsing any product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circumstances. The information in this document was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circumstances or conditions. NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THIS DOCUMENT EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.