Smarter Payments

Real Time Payments Can Improve Control in Uncertain Times

Four steps to improve speed, efficiency and customer choice.


Instant payments can be an advantage during uncertain or challenging times, when employees and business alike closely monitor every debit and credit. It offers speed and control when they’re most needed.

Want to give a gig or hourly employee access to earnings immediately after their shift to increase their satisfaction and loyalty? Have vendors on the West Coast and need to pay them after the Eastern Time Zone window closes? Maybe you want to ensure quick reimbursement for a negative customer experience because an order couldn’t be completed as planned.

Enter real-time payments, or RTP. The first new payment rail in 40 years, RTP transactions clear and settle in real time—around 15 seconds or less—regardless of the time or day of the week.

When RTP Makes Business Sense

Real-time payments are a powerful payment option to add to your toolbox. RTP complements, rather than replaces, ACH and wires.

Popular use cases for RTP:

  • B2C—Refund your customers immediately, allowing them to validate receipt during your conversation
  • B2B—Pay your suppliers faster, improving relationships and reducing time spent on processing and tracking payments
  • Employee payments—Enable your gig, part-time or contract workers to get paid immediately after a shift or work is completed, an option so in-demand many are willing to pay a service fee for it
  • Insurance claims—Provide those suffering from a car, home or other loss with immediate access to funds
  • Account-to-account—Enable transfer of funds between a customer’s accounts held at different entities, such as between PayPal and their bank

The demand for real-time payroll is increasing, and may eventually become a standard expectation—especially among gig and hourly workers. Adopting RTP now can help your business stay ahead of this coming trend.

Startups likely to benefit from RTP include those in the fintech, e-commerce, gig economy and payment processing spaces, and those keenly focused on customer satisfaction. J.P. Morgan clients like PayPal, Venmo, Digit and Modern Treasury are just a few examples of brands already leveraging RTP. Ultimately, RTP is for any startup looking to disrupt their space or add value to their business—whether it’s a competitive edge or giving users peace of mind with instant access to their funds.

RTP is strategically advantageous because as a payment type, it can fundamentally change or enhance your core business model.

Greg Kerwick, Managing Director, J.P. Morgan Commercial Bank

4 Steps to Implement RTP

1. Evaluate whether it makes sense for you. Some of the questions that can help you think through this: How does this fit into my business model? Are my customers demanding it, or will it give me a competitive edge? What are the cost-per-transaction impacts compared to the potential of generating a new revenue stream? In our experience, whenever a business sees added value from RTP and anticipates enough volume to warrant the technical effort, they decide to move forward with adoption.

2. Talk to your banker. Your banker understands your business model, so you can trust them to help strategically grow your business. Also, in order for a bank to send real-time payments, they must have invested in converting their downstream systems from batch to real-time processing—a critical step to support RTP at scale.

3. Get to know the tech integration. Compared to the days of batch processing, there’s a lot more that goes on behind the scenes to ensure successful payment delivery instantaneously. Application program interfaces (APIs) are the key integration method to send and receive payment instructions in real-time and enable RTP across systems. Evaluate your team’s familiarity and ability to handle APIs. If they don’t have expertise, you may need to bring in an outside vendor, which has cost and time implications. The more familiar your team is with this technology, the quicker your onboarding time will be. We’ve seen customers implement RTP in a few weeks, and others take a few months—each business is unique.

4. Understand what it means to operate in real time. You will need to be ready to operationalize working in a real-time environment, which can significantly impact your accounting and control functions. How will you handle real-time failures? How will you record outgoing flows in real-time to your sub-ledger? Aligning RTP workflow to complement existing batch processes, such as ACH, will likely take some re-engineering of existing approaches.

The transition from batch processing to real time can be painful. Having the right partnerships and support can make it easier—and the end result is often worth the effort. 

Sam Aarons, Co-founder and Chief Technology Officer, Modern Treasury

Instant Payments, But a Side of Risk

One outcome to having payments delivered in real time is that fraud checks must be performed in real time as well—given that funds are irrevocable once sent. But just as with other fraud risks, there are precautions you can take, like incorporating Early Warning Services—which can provide account validation of the recipients’ bank account information—as part of the payment process.

Other things to know:

  • Adoption is new, and the network only covers about 50-60 percent of US households—though that number continues to grow
  • Today, 11 banks can initiate RTP and 21 can receive them
  • There isn’t cross-border adoption yet
  • The transaction limit recently increased from $25,000 to $100,000

Interested in adopting RTP for your business? The first step is to connect with your IT and finance teams, and then reach out to your banker to discuss options.

Is the payment industry coming up to standards with the tech world? No, RTP is technology catching up to cash.

Carlos Rotger, Technology Lead, Bank Integrations, Digit

Fast Facts on RTP at J.P. Morgan

  1. J.P. Morgan is among the major banks that are members and founders of The Clearinghouse, which launched The Clearing House RTP network in 2017.
  2. J.P. Morgan launched its RTP product in 2018. In just one year, the bank went from client pilots to processing 5 million transactions per month.
  3. J.P. Morgan's services of clients like PayPal, Venmo, Digit and Chase.com are built around the solution’s capabilities.
  4. J.P. Morgan is a leader among global banks, delivering RTP in USD, GPB and EUR.
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