3 ways to make practical use of real-time payments

Discover how organizations can put real-time payment technologies into practical use, from bill payments to intelligent routing and low-value wires.

In the past few years, the idea of real-time, instant payment processing in the business world has evolved from theoretical to practical. However, multiple logistical and financial challenges remain for organizations considering this emerging trend.


We’ve noted in the past that adoption of real-time payments, whether through The Clearing House’s RTP® network or a similar effort, is a two-way street. When making a business case for real-time payments, it always helps to have some practical business problems that the network can help solve. At U.S. Bank, we want to assist with resolving this need.


Interestingly, speed of payment processing is just one of the benefits to RTP. The real multiplier effect is in the amount of remittance data that can be transmitted along the new rails back and forth between the payer and the payee. The speed of payments is often a secondary benefit when discussing RTP as a solution, especially in a B2B context.


We believe that RTP will operate side by side with legacy payments for a while. Let’s look at some practical use cases for real-time payments in three distinct areas: bill payments, third-party services and optimized routing.


This is one of the many payment methods available. Consider RTP within the suite of all faster payments. While there are several use cases for RTP technology, here are a few examples.


Use case #1: Bill payments for rent and utilities

In this first example, we see a property tenant using whatever means necessary to cover rent and utility costs month-to-month. This renders bill payment sporadic, and often delays processing. The different payment methods – cash, check, ACH, for example – make it difficult for property management to process payments quickly.


In this use case, RTP can help remedy the organization’s key pain points – uncertain payment timing, challenging cash management and insecure payment processing. With RTP, an organization can: 

  • Save money by replacing card-based payments and check processing
  • Improve security by receiving immediate confirmation of delivery
  • Reduce the risk of check fraud and bounced checks


This example can be applied across a wide variety of organizations, such as property managers, or auto dealers, for processing down payments, or other high-volume, small value billing situations. It also can overlap with typical business-to-consumer disbursements, such as deposit returns and auto dealer refunds.


Use case #2: Financing vendors and startups

In this second example, we see a new fintech startup trying to keep up with the latest payments trends and innovations.


In this use case, the fintech company wishes to remain at the forefront of payment technology, while still providing a good experience for their customers. With RTP, the fintech company or mid-size bank can:

  • Drive further RTP use, and allow other entities to keep up with the latest payment trends and offerings for their customers
  • Become one of the first financial institutions to fill a market need for RTP network connection

Note that the highest potential for RTP adoption lies with organizations that prioritize domestic, low-value payments.


Use case #3: Route payments via the best possible route

With so many choices in the market, it’s possible to look at your business objectives and apply some smart logic. RTP can help customers who may be using other payment types today, like wires and checks.

In this third example, we see a security and investment management firm with an abundance of low-value wire transactions. They struggle through a manual process, which often ends up costing more in the long run. Thanks to an intelligent routing system within RTP, this type of organization can eliminate much of that manual work.


In this use case, RTP can help remedy the organization’s key pain points – excessive costs from inefficient payment processes, complexity from different reporting and/or billing models, and long processing times. With RTP, this organization can:

  • Bypass the initial payment method specification, because they only need to submit payment information
  • Automate payment routing to optimal methods for each customer
  • Standardize reporting, billing and exception handling


For organizations with extensive low-value wire transactions, RTP provides a potential lifeline from manual busywork and costly exception and refund processing.

These are just a few examples of RTP use that we’re exploring in the next several months. If you’re in any of these industries or relate to any of these scenarios, RTP may be able to help you modernize your payments processing.



Innovation is just one part of a broader payments strategy. Contact U.S. Bank for more information.