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Education

Payments in real time appropriate third party. Bank wires
were obviously not built to manage
and near real time cash app payments.
In review
By Ken Musante As I shared in "Payment in real
Napa Payments and Consulting time," www.greensheet.com/emagazine.
php?article_id=6928, the demand for
f you have sent or received money via a cash real-time payments is surging around
app, like Zelle, you know the transfer happens the globe and particularly within
in real time. Unlike a traditional ACH, real-time the United States. Spurred by the
I payments occur in real time, where ACH, even COVID-19 shift to digital payments
Same Day ACH, are batch transactions. and mobile wallet adoptions,
freelance workers often seek instant
Payments made via Zelle are both instant and payment for their services.
irrefutable. If you've paid the wrong person via Zelle,
you are at their mercy to return your funds. Some other prominent cash apps From an employer's standpoint, real-
may have the same features as Zelle, but only allow for instantaneous transfers time payments offer a cost-effective
for money already in their cash app and only going to another user of that same advantage, especially in the face of
cash app. a competitive workforce within the
gig economy. Currently, The Clearing
This is distinct from Zelle which utilizes The Clearing House’s Real Time House’s solution is only available
Payments (RTP) solution to facilitate these low-value person-to-person (P2P) within the United States, but that
payments. For such a solution to work, each individual transaction must be may change in the coming months.
cost efficient and received by a bank connected to The Clearing House or The debut

In April of this year, The Clearing
House disclosed plans "to launch a
pilot service for immediate cross-
border (IXB) payments with the
support of banks from both sides
of the Atlantic. The pilot service is
scheduled to begin by the end of this
year with several participants joining
the service in a phased approach" (see
https://prn.to/3QvuiZS).

This is a significant step in furthering
the availability of low-cost, real time,
international payments. Payment
providers may soon be able to pay
merchants instantaneously and by
transaction. While in the context of a
coffee house, this seems unwarranted,
for a personal service professional or
contractor, the immediacy may be
warranted and potentially a service
differentiator.

And what’s new
Other near real time payment and
international solutions (for select
countries) are Mastercard Send and
Visa Direct. Both solutions reverse
the settlement process and allow
funds to be "pushed" to an eligible
card connected to a checking account.
While the funds will be available

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