Commercial Bank of California is proud to be one of the few banks in the nation to accept real-time payments. Now more than ever, businesses need safer and faster payments to keep up with advances in mobile technology and digital commerce. Real Time Payments (RTPs) will aid businesses in this growing sphere. This is part of our commitment to providing clients with transformational financial products under our CBCash suite of offerings.
Real Time Payments (RTPs) were adopted in the United States in 2017 and run on a separate payment mechanism called the RTP® Network. All federally insured U.S. depository institutions are eligible to use RTPs for payments innovation, however less than 200 banks leverage the technology nationwide.
By accepting RTPs, we’re empowering our clients to not only get paid faster, but get more data and insights into their payments that will help streamline their business operations.
What are real-time payments?
Real-time payments are facilitated through The Clearing House (TCH) RTP® network initiates, clears and settles payments instantly. RTPs operate 24 hours a day, 7 days a week, 365 days a year to process online transfers instantly, including holidays.
In order to receive a RTP, the banks' backend system must connect to the RTP network either via a direct connection or a third party service provider. We have partnered with FIS™, a global leader in financial services technology, to accept RTPs.
There has been no governmental mandate that banks adopt RTP technology, however FedNow (the Federal Reserve’s anticipated real-time solution) is anticipating a 2023 or 2024 launch. Once the technology is more widely adopted, we will have extensive experience in facilitating RTPs and supporting clients through the onboarding process.
Real-Time Payments vs. Faster Payments
Even though real-time payments are often considered to be similar to “faster payments,” there is a strong distinction between the two. Furthermore, not all faster payments are processed in real-time.
Other payment solutions, like Mastercard’s and Visa’s push payment solutions will message transactions within seconds or minutes. However, because they do not also settle transactions quickly, they are also not considered real time.
Real-time payments process transactions instantly, and users get messages for an approved transaction within minutes and instant access to funds.
The Value That Real-Time Payments Bring
Fastest Way to Process Payments
Real-time payments process and settle payments instantly, making the funds available just as quickly. For those individuals or businesses that need funds ASAP, instant access to funds can be a game changer to conduct daily operations and close the books by the end of the day.
Customers transacting via mobile banking within the RTP network are protected from falling victims to online cash interceptions. The Clearing House acts as the middleman between the payer and the payee, thus guaranteeing maximum security while stabilizing the financial system.
Real-Time Payments And P2P Payment Apps
Real-time payments opened doors to fintech advancement with adoption of peer-to-peer (P2P) payments, however RTPs are poised to compete with leading P2P apps. Such apps including PayPal, Zelle and Venmo have diversified the financial system, leading to the replacement of IOUs, checks and cash. P2Ps have also facilitated instant payments, furthering the mission for RTPs, which has resulted in the smooth circulation of money within the economy.
In recent years, P2P apps have integrated with TCH’s RTP network in order to offer an option to transfer money instantaneously from the app to a bank account (usually for a fee). Otherwise, these third party apps often hold on to your money before depositing it into your account, stifling your cashflow.
Emerging B2B Use Cases For Real-Time Payments
The benefits of integrating TCH's RTP network with P2P applications, such as PayPal for your business, stretch beyond P2P payments. Even though the processes are versatile, there are several use cases where industry players have reported positive results. It’s clear that B2B transactions will benefit the most. Perks include:
- Liquidity administration
- Instant bill disbursement
- Availability of remittance information
- Swift movement of rich data providing actionable information concerning corporate clientele needs
- Payment confirmation
- Enhanced control on payments timing
Revamp Your Payment Processing Today
The more banks that are willing to accept real-time payments, the more we will drive a better utilization of the network and its benefits for businesses. Get in touch with us today to learn how you can receive RTPs and other ways to improve your business with transformative financial products.