Realtime Retail Payments (RTRP) systems are a global phenomenon. These systems exist or will soon in over 50 countries around the world. Some have been in operation for decades. The UK’s Faster Payments system, operated by Mastercard’s Vocalink unit, has been in operation for over ten years. Still others are still in the design stage.
These account-to-account systems (A2A) have gained in regulator popularity because:
Most Americans still have no idea there’s a new national payment system in operation. Or that a similar one will begin operation in a few years. Wallets like Venmo and the Cash App abound. But an entirely new set of payment rails? That happens once in a generation.
Some of those Americans, on the other hand, may have experienced what a system like this can do. Zelle is a fast push payment system that moves money between banks accounts. But Zelle is more of a directory-enabled messaging layer. The money movement between banks relies on older payment rails like ACH and wires. New Age messaging and user experience; old fashioned settlement.
Key RTP CharacteristicsPayments geeks, like Payments on Fire® listeners, know that the Real Time Payments Network takes a different approach. Operated by bank processor, The Clearing House, the RTP Network leaves management of the user experience and the use case up to the bank, the processor, or the provider serving a particular industry.
The RTP Network provides:
In short: the RTP Network provides the plumbing and pipes. What it looks like and how it’s used is up to another stakeholder.
Members of the network are financial institutions who either expose the RTP rails themselves or sponsor third party access so that those entities can make use of them. Nothing groundbreaking there.
An RTRP with RTGSOne of the impressive features of the RTP Network is that interbank settlement, the movement of funds between the sender and receiver banks, happens in realtime. The two banks settle their positions instantly. Settlement happens in realtime for every transaction. That’s what a realtime gross settlement (RTGS) does.
Contrast that with a system like Zelle that provides instant messaging among the stakeholders but typically leaves the final movement of monies between banks to an overnight batch process via ACH. And this is net, not gross, settlement. The amount includes all of the day’s transactions.
The RTP network achieves its RTGS capabilities using the following technique:
That’s a lot of background to help US contrast this system against the other four mostly digital systems in the U.S. (If you’re not clear on that, join us for the best in payments education at a Glenbrook Payments Boot Camp®)
The RTP Network is in its fifth year of operation. In this Payments on Fire® episode, Steve Ledford updates us on:
So, take a listen.
Here’s Steve talking about those new COVID-driven use cases.
For a snapshot of how the faster payments phenomenon is growing in the U.S. here is the 2020 Faster Payments Barometer.
Read the episode transcript
Find more podcasts, visit Glenbrook's Payments on Fire® site
Read expert payments industry commentary at Payments Views.
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Read our COVID-19 Payments Industry eBook
Episode 139 - Building Digital Infrastructure for Small Business - Barry McCarthy, Deluxe
Episode 138 - Open banking, Recurring Payments, and a Global Debit Network - Duncan Barrigan, GoCardless
Episode 137 - Ecosystem Enablement for Financial Inclusion of the Poor - Kosta Peric and Paula Hunter on Mojaloop
Episode 136 - Global Payments and the Fintech Innovations Changing the Industry - Carol Coye Benson, Glenbrook
Episode 135 - Innovation in Payments - Russ Jones, Glenbrook
Episode 134 - Ecommerce Fraud in the Time of COVID - Eyal Raab, Riskified
Episode 133 - Payments are (still) on Fire - Steve Sarracino, Founder, Activant Capital
Episode 132 - Glenbrook's Erin McCune Talks B2B with Cit's Tony McLaughlin
Episode 131 - Bridging the Payment Information Gap with Phixius - Peter Tapling
Episode 130 - Privacy Regulation and the High Stakes of Compromise - Scott Giordano, Spirion
Episode 129 - How COVID Changes the Shape of Fraud - Rafael Lourenco, ClearSale
Episode 128 - How a NextGen Payments Company Builds on the Cloud - Eric Rosenthal, Rapyd
Episode 127 - The Hot Topics in Digital Payments - Russ Jones, Glenbrook Partners
Episode 126 - New Tech, New Models: ACH at the POS - Craig McDonald, Trustly
Episode 125 - COVID-19 Relief: Collaboration, Regulation, and Tech Do Good - Roberto Marinho, CEO, César Souto, Conta Zap, Brazil
Episode 124 - Ground Truth: COVID-19’s Payments Impact - Glynn Frechette, PSCU
Episode 123 - A Trip into the Nigerian Payments Ecosystem - Charles Ifedi, eBanqo
Episode 122 - Maximizing Authorization Rates and More - Jeanne DeWitt, Stripe
Episode 121 - Acquiring the E-commerce Cross-Border Merchant - Moshe Selfin, Credorax
Episode 120 - Deep Dive into Real-time Payments in Developing Markets - Elizabeth McQuerry, Glenbrook Partners
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