Real-time payment
What is real-time payment?
Real-time payment (RTP) is a bank transfer where initiation, clearing, and settlement complete within seconds, giving the recipient immediate access to the funds. Once the transfer is approved it is final, and the payer can't reverse it.
RTP runs on dedicated rails that operate continuously, unlike batch systems such as the , which group transactions and release them on a fixed schedule. These rails carry only : the payer sends money from their own account, and the recipient can't pull funds out of it. That direction also removes the reversal route a gives on cards. Account-to-account checkout flows built on are initiated through these same rails.
Key facts
- Also known as: instant payments, immediate payments, faster payments
- Direction: push only, initiated by the account holder sending funds
- Availability: around the clock, including weekends and bank holidays
- Settlement: finality arrives with the funds, so isn't deferred to a later cycle
- Message standard: ISO 20022, which carries remittance details alongside the payment instruction
- Major systems: RTP and FedNow (US), Faster Payments (UK), instant credit transfer (euro area), UPI (India), Pix (Brazil)
- Reversal: no cardholder-style dispute route; recovery depends on the receiving bank returning funds
How it works
- Initiation – The payer starts the transfer from their bank account or app and attaches a reference such as an invoice or booking number.
- Payer bank checks – The sending bank validates the account and available balance, runs sanctions and fraud screening, and authorizes the instruction.
- Clearing – The instruction goes to the real-time payments platform, which validates its format and routes it to the recipient's bank.
- Acceptance – The recipient's bank confirms the beneficiary account can take the credit and responds inside the scheme's response window.
- Settlement – Funds move between the participating banks' accounts at the central bank or clearing house, and the beneficiary account is credited.
- Confirmation – Both parties receive a confirmation message, within seconds of initiation.
Why it matters
- Funds arrive final, so a merchant can ship an order or credit an account without waiting for a clearing window to close.
- Continuous operation removes cut-off times: a transfer sent on a Sunday evening lands the same evening rather than on the next business day.
- Card interchange doesn't apply, because the money moves bank to bank rather than across a card network.
- ISO 20022 messages carry remittance data with the payment, so a transfer can be matched to an invoice without a separate reconciliation file.
- A to a supplier or seller reaches the recipient's account the moment it is sent, not overnight in a batch.
Common issues
- Authorized push payment fraud – Criminals use social engineering or account takeover to impersonate a legitimate payee. Because the payer authorizes the transfer, the bank treats it as a valid instruction, which puts this outside the checks that block unauthorized card use.
- No recall path – Once funds land, recovery depends on the recipient's bank freezing the account. Stolen money is often moved on across channels within minutes.
- Misdirected transfers – A wrong account number credits the wrong beneficiary with no automatic recall. Confirmation-of-payee checks catch this by matching the account name before the transfer is sent.
- Reachability gaps – Not every bank participates in every scheme, so a transfer can drop back to a slower rail.
- Refunds as new payments – A is a separate transfer back to the payer, not a reversal, so both legs appear in reconciliation.
