The Clearing House Payments Co. LLC, operator of the Real Time Payments network, said Thursday that it will raise the RTP transaction limit from the current $25,000 to $100,000 effective Feb. 1.
Steve Ledford, TCH senior vice president of product strategy and development, tells Digital Transactions News the limit is being raised “because there is demand for it, that’s the simple answer.” He says TCH frequently gets requests form bank treasury-management executives saying their customers “need to send more than $25,000. Or, when we talk to corporate practitioners, that’s No. 1 on their list.”
The types of real-time payment transactions that can take advantage of the higher limits include invoice payments, account-to-account transfers such as money movements into and from savings accounts, and certain business-to-consumer payouts such as insurance claims, according to Ledford.
“Most invoices are less than $25,000, but a sizable number are over that,” Ledford says. Another use case is immediate payroll payments to highly compensated employees, he adds.
New York City-based TCH’s move mirrors an impending transaction-limit increase on the automated clearing house network for same-day ACH settlements. ACH governing body Nacha has approved raising the current $25,000 same-day cap to $100,000, effective in March.
TCH took its cue from the ACH in setting the original $25,000 limit when the RTP network launched in late 2017, but it arrived at the new $100,000 limit based on its own research, according to Ledford. “We’re both responding to demand for payments between $25,000 and $100,000,” he says. “$100,000 actually captures a great deal of the flow in these types of systems.”
Under TCH’s new rules, RTP network depository institutions are required to accept payments up to $100,000. Individual participants, however, may set a lower value limit for payments they originate, the company said.
TCH wouldn’t reveal RTP transaction numbers or total volume, but says the network recently has been growing 20% month-on-month. The average transaction size is $350, Ledford says.
Upcoming for the RTP network is a test this summer of a request-for-payment service for bill payments, according to Ledford. Billers will be able to send a secure notice to consumers through their banks’ online and mobile sites that a bill is coming due, and customers will be able to make immediate payment if they want. TCH is in the midst of recruiting billers and financial institutions for the pilot program.
Also on Thursday, TCH announced that receipt of real-time payments is now available for corporate, retail, and small-business customers of San Francisco-based MUFG Union Bank N.A. via the RTP network.