In order to increase the attractiveness of its real-time payment network (RTP), The Clearing House is increasing the transaction limit for one-time payments to $ 100,000 as of February 1.
Changing the maximum amount of a single real-time payment will quadruple the size of the existing limit of $ 25,000 in an effort to make the RTP network more attractive to financial institutions and users. It will also create an additional point of differentiation between TCH’s RTP network, owned by the bank, and other competing private and public faster payment networks. For example, the automated clearinghouse, which processes the bulk of all electronic transactions in value according to the Federal Reserve, offers a faster ACH same-day payment service with a limit of $ 25,000 per transaction.
As TCH tries to make the RTP network more attractive, the Federal Reserve is looking to build a potentially competitive real-time payment network called the FedNow Service, which was announced last August with a proposed limit of $ 25,000. The FedNow service is scheduled to launch in 2024, however Recent developments could potentially accelerate this launch date.
There is also increasing calls for different faster payment networks to work collaboratively with each other rather than against each other.
“Raising the transaction value limit to $ 100,000 is the next logical step for the growing RTP network. Businesses and consumers often want to send higher value payments and the $ 100,000 limit helps meet their needs, ”said Steve Ledford, senior vice president of product strategy at The Clearing House, in a statement. Press.
The new rules will require depository institutions on the RTP network to accept real-time payments up to a value of $ 100,000. However, individual financial institutions operating on the RTP network will be allowed to set lower limits for the transactions they initiate.
A major challenge posed by increasing the maximum payment limit is the perception of an increased level of risk for operators on the network, as real-time payments leave little room for error and require anti-risk controls. – vigilant fraud. This is because one of the key principles of a real-time transaction is finality. In other words, an erroneous or fraudulent transaction that is processed in real time generally cannot be recovered.
TCH launched the RTP network in 2017, and despite a slow adoption rate, it now has 21 of the top 25 banks live on the network, allowing over 50% of DDAs to receive payments in real time. A major challenge for TCH is to get small banks and credit unions to offer its RTP service. In July, nearly two years after the launch of RTP, TCH announced Avidia Bank joined as the first community bank on its RTP network.