As digital payments evolve, businesses will have to navigate a growing range of payment rails—each with its strengths. Understanding how RTP and ACH compare is key to choosing the right option for speed, cost, and security.
Real-Time Payments: The New Standard of Speed
Introduced by The Clearing House in 2017, the RTP® network enables instant payments, 24/7/365. Funds are settled in real time and are immediately available to the recipient. Real-time payments are particularly valuable in scenarios requiring immediate attention.
Use Cases: Real-time payments are ideal for same-day instant bill payments, peer-to-peer transfers, real-time payroll, and urgent vendor or supplier disbursements. These scenarios benefit from immediate settlement and 24/7 availability.
ACH: The Reliable Workhorse
The Automated Clearing House (ACH) network has long been the backbone of electronic payments in the U.S., facilitating direct deposits, bill payments, and recurring transactions between bank accounts. Governed by Nacha, ACH processes payments in batches, typically settling within one to three business days. Cost-effective and well-suited for high-volume, lower-value payments, ACH also offers same-day options, however, they remain limited by set processing windows.
Use Cases: ACH is commonly used for payroll deposits, mortgage and rent payments, utility bills, and subscription services—making it ideal for recurring payments that are non-urgent.
RTP vs ACH: Key Differences
As financial institutions modernize their payment offerings, understanding the distinctions between RTP and ACH transfers is essential. While both systems facilitate electronic money movement, they serve different use cases and offer unique benefits and challenges.
Speed/Settlement Time
RTP transactions are processed and settled in real-time—typically within seconds—providing immediate confirmation and access to funds. In contrast, ACH transfers operate in batches and can take one to three business days to settle, although same-day ACH has shortened this window for some transactions.
Availability and Reversibility
RTP is available 24/7/365, including weekends and holidays, ensuring constant access to payment capabilities. ACH operates only during banking hours and does not process on weekends or federal holidays. Additionally, RTP transactions are final and cannot be reversed once sent, whereas ACH payments can be reversed under certain conditions, such as fraud or error. This makes ACH the safer payment method for some users.
Cost
ACH transfers are generally low-cost or free for consumers and cost-effective for institutions, typically ranging from $0.26 to $0.50 for standard ACH, making it ideal for recurring, non-urgent payments. RTP is also competitively priced, usually costing $0.01 to $2.00+ per transaction, but may carry slightly higher fees due to its real-time processing and infrastructure requirements. Actual costs vary depending on the financial institution and volume.
Security and Fraud Risks
Fraud risks vary across rails: ACH transactions are reversible, offering a safeguard while also making them a target for fraud. RTP network and FedNow Service transactions are irrevocable, requiring stronger upfront fraud controls to protect senders.
Transaction Limits & Messaging Capabilities
RTP and FedNow both have a network-level transaction limit of $10 million and $1 million, respectively, though individual financial institutions may set lower limits. Same-Day ACH, by contrast, supports transfers up to $1 million, while standard ACH has no network-imposed cap but is slower, typically used for non-urgent payments. Ultimately, transaction limits are determined by the financial institution, even if the network allows higher thresholds. RTP also offers advanced messaging capabilities, enabling payment-related details (like invoices or remittance info) to be included with the transaction in real time. ACH lacks this functionality, often requiring separate communication to share such details, which can complicate the payment processing experience.
RTP vs ACH: Which Payment Rail Should Businesses Use?
Given the differences between RTP and ACH, a multi-rail approach is essential. Supporting ACH, RTP, FedNow, and wire transfers allows businesses to optimize for speed, cost, and security, meet customer expectations, reduce dependency on any single rail, and remain adaptable.
To learn more about real-time payments, watch our webinar ACH & Real-Time Payments: Finding the Right Mix for Your Institution
Alacriti’s centralized payment platform, Orbipay Payments Hub, provides innovation opportunities and the ability to make smart routing decisions at the financial institution to meet their individual needs. Financial institutions can take full ownership of their payments and control their evolution with ACH, Wire, TCH’s RTP® network, Visa Direct, Zelle®, and the FedNow® Service, all on one cloud-based platform. To speak with an Alacriti payments expert, please contact us at (908) 791-2916 or info@alacriti.com.
