What Is the RTP Network, and How Could It Boost Your Banking Experience in 2024?

One point that Americans can all agree on is that we all love to get paid. The past few years have seen a rise of peer-to-peer (P2P) payment apps like Cash App, PayPal, and Venmo, as people look for quick ways to send money to their friends and family, and small businesses look for more options to get paid online and in-person. 

But what if there were another easy way to move money between bank accounts instantly, without the delays of checks, wire transfers, or ACH payments? That's what the RTP® Network is helping to provide. 

The "RTP" in RTP® Network stands for "real-time payments." The network is a group of more than 400 participating financial institutions (banks and credit unions) that have all agreed to implement the new real-time payments standard and offer real-time payments to their customers. The RTP Network was launched in 2017. According to the network's data, as of July 2023, more than 3 million customers per month were making payments via the RTP® Network. As more banks and credit unions join the network, more new banking products and services are becoming possible because of real-time payments. 

Let's learn more about the RTP® Network and how it might improve your banking experience in 2024 (and beyond). 

Real-time payments defined 

The RTP® Network is an exciting innovation in banking, because it's making it faster to send payments and move money. America's banking system has been slow to adopt real-time payments compared to other countries. 

The usual ways that most people move money are slow and full of friction. 

ACH payments 

When you use your bank's online bill pay tool to send a payment to a company or send money to a friend or relative, you're sending a money transfer called an "ACH transaction." This type of payment uses the Automated Clearing House (ACH) network to move money between banks. ACH payments take one to two business days (or longer) for the money to clear. These payments get processed in batches during the bank's business day; think of it as a gigantic invisible traffic jam in the back-end of the banking system, as millions of payments wait for a green light.  

Checks in the mail 

Sending a check by mail can take five business days or longer. Paper checks might seem outdated, slow, and risky (fraudsters could steal your mail and use your checks to commit identity theft and other financial crimes). But Americans are still using paper checks. Federal Reserve survey data found that in 2021, Americans made 11.2 billion payments with checks, with an average amount of $2,430 per check. 

Wire transfers

If you need to send a large amount of money for a high-stakes transaction, like purchasing a new home, and the money absolutely has to arrive on that same day, a wire transfer could be the best choice. But this type of payment costs money to send: typical bank fees for wire transfers range from $5 to $35. ACH transfers are slower, but free. 

Real-time payments can be better than all of these money transfer options, because the payments happen immediately, in real time. You don't have to worry about losing a check in the mail, paying a wire transfer fee, or refreshing your mobile banking app over and over again to make sure an ACH transaction went through. 

How the RTP® Network is inspiring better banking products 

As a bank customer, you usually don't have to spend much time thinking about the back-end of the financial system, or how payments move between bank accounts. But the RTP® Network is a pretty big deal for bank customers, because it's making it possible for financial institutions to launch new services that can make your personal finances better. Here are a few examples. 

Zelle: moving money instantly 

Zelle is a real-time payment service offered by many banks and credit unions. It lets you send money from your bank account to anyone with a bank account, just by knowing the other person's phone number or email address. You don't have to both be signed up for the same mobile app, you don't have to write a check. You can send money instantly from your bank account to theirs. Zelle uses the RTP Network for payments where both customers' banks are participating institutions in the network.  

Wealthfront: same-day withdrawals from brokerage account 

Wealthfront is an investment platform and robo-advisor that recently announced a great new feature for its Wealthfront Cash Account. Customers can now make free same-day withdrawals from their Wealthfront Cash Account in real-time, as long as their bank or credit union is a participating member of the RTP Network. This new feature can help Wealthfront customers get more flexible access to their cash. 

Real-time payments make it easier and safer for people to keep more of their money in interest-bearing accounts -- while still being able to quickly withdraw cash in case of unexpected expenses.

Bottom line: Banks are working to move money more conveniently between accounts and help people get paid faster. In the future, we're likely to see more banking products that advertise real-time payments, such as FedNow®, a government-run instant payment program that launched in 2023. Another example is early direct deposit, which some banks offer so people can get their paychecks two days early via ACH transaction. Look for more of these banking services to get faster, easier access to money -- without waiting for a check in the mail.