8APRIL 2025OPINIONIN MYTHE IMPACT OF RTP TO THE MOBILE PAYMENT ECOSYSTEMBy Attila Csutak, Faster Payments, Vice President, City National BankThe payments industry in the United States stands at the height of a complete digital transformation. Rapidly changing technology innovations are pushing how consumers and business expectations evolve with payments.In the last seven years, the U.S. has made up for lost time and is slowly closing the gap with its European, Latin American and Asian counterparts. Five new distinct faster payment methods are now available to accelerate B2B, B2C and P2P transactions:- SameDay ACH- Debit Cards Push services like· Visa Direct service· MasterCard SendTM- Early Warning Service's Zelle®- The Clearing House's RTP® network- The Federal Reserve Banks' FedNow SM ServiceSameDay ACH is perhaps the most ubiquitous faster payment method in the U.S., which enables its users to pay almost any business or person with a checking or savings account, using the established ACH (Automated Clearing House) network. Any domestic ACH transaction under $1MM (credit and debit) can now qualify for same day processing, only international payments are exempt. SameDay ACH still needs a payee's bank account and routing number, but unlike regular ACH payments which take 1 or 3 days, same day payments settle in just hours, by 5:00 pm local time.The Debit Card Push service from the two major credit card companies in the world, uses the VISA and MC merchant system to move funds. In the same way that merchants push a credit for a product return, businesses can now issue a credit to a checking or savings account for any type of B2C payment. Funds are available to consumers in just minutes, for businesses there is less risk, as the service requires only a debit or credit card number and expiration date, there is no need to capture and store sensitive bank account numbers in their system.Settlement is not necessarily real-time all the time; Zelle is backed by more than 1,800 banks and credit unions. Consumers can sign up through their bank or directly with EWS via the Zelle Purple App. Funds move quickly, electronically and securely between bank accounts.RTP (Real-Time Payments) is the first new bank to bank payment system in the U.S. for over 57 years, payments can occur 24 hours a day, with settlement taking place within seconds. The first $3.50 transaction was moved between a U.S. Bank and BONY account in under 15 seconds on Nov 13, 2017.FedNow is a new interbank clearing and settlement service that facilitates instant payments 24x7, 365 days a year. This separates the system from Automated Clearing House (ACH) and Fedwire (the Federal Reserve's system for large payments), which only operates during standard banking hours.Faster Payments are faster than legacy payments that take up to several days or weeks in some instances, but it is still slower than Real-Time Payments. For clarity, all Real-Time Payments (or Instant Payments) are Faster Payments, but all Faster Payments are not Real-Time Payments.Faster Payments are accelerated payments from legacy rails that reduces payment times between banks' customer accounts from days to the same day (e.g., SameDay ACH ­ end of day). While Real-Time Payments/FedNow combines immediate funds availability, settlement finality, instant confirmation, and integrated information flows ­ all made in under (15 to 20) seconds.Real-time payments already had a transformative impact on the mobile payments ecosystem, reshaping the way individuals, businesses, and financial institutions conduct transactions through mobile devices. This shift is driven by several key factors:1. Speed and Convenience: Real-time payments offer an unparalleled level of speed and convenience. Mobile payment apps and platforms can leverage real-time payment functionality to provide users with instant transfer capabilities. This immediacy enhances the user experience and encourages more people to use mobile payments regularly.2. Increased Mobile Payment Adoption:The integration of Real-time payment functionality within mobile payment apps has the potential to drive adoption. Users are more inclined to rely on their mobile devices for transactions when they Attila Csutak
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