Quick Comparison: ACH vs Wire vs RTP
Here is how the three payment methods compare across the factors that matter most to businesses:
| Feature | ACH | Wire | RTP |
|---|---|---|---|
| Speed | 1–3 business days | Same day (hours) | Seconds |
| Typical Cost | $0.20–$1.50 | $15–$50 | $0.50–$2.50 |
| Availability | Business days only | Business days only | 24/7/365 |
| Transaction Limit | Varies by bank | No set limit | $1 million |
| Reversibility | Limited window | Generally final | Final once sent |
| Best For | Routine, high-volume | Large, urgent | Urgent, moderate value |
What Is RTP (Real-Time Payments)?
RTP is a real-time payment network operated by The Clearing House, a banking association owned by major U.S. banks. Launched in 2017, RTP enables instant bank-to-bank transfers that settle in seconds, available 24 hours a day, 7 days a week, 365 days a year.
Key characteristics of RTP:
- Instant settlement: Funds are available to the recipient within seconds
- Always on: Works on weekends, holidays, and outside banking hours
- Irrevocable: Once sent, payments cannot be reversed
- Confirmation: Both sender and receiver get immediate confirmation
- Current limit: Up to $1 million per transaction
What Is FedNow?
FedNow is the Federal Reserve's instant payment service, launched in July 2023. It provides similar functionality to RTP but is operated by the Federal Reserve rather than a private consortium. Having two instant payment networks increases competition and is expected to accelerate adoption.
For most businesses, the practical difference between RTP and FedNow is minimal—both enable instant payments. The key factor is whether your bank supports one or both networks.
When to Use Each Payment Method
Use ACH When:
- Making routine, recurring payments like payroll or vendor invoices
- Processing high volumes of transactions where per-transaction cost matters
- Speed is not critical—you can wait 1–3 business days
- You want the lowest cost per transaction
- Batch processing fits your workflow
Use Wire Transfers When:
- Making very large payments exceeding RTP limits
- Sending money internationally (ACH and RTP are domestic-only)
- The recipient requires a wire (common for real estate, legal settlements)
- You need same-day funds and RTP is not available
Use RTP When:
- You need immediate, confirmed delivery
- Making time-sensitive payments outside business hours
- Speed matters but you want to avoid wire transfer fees
- Paying contractors or vendors who need instant access to funds
- Sending payments on weekends or holidays
Cost Comparison Example
To illustrate the cost differences, consider a business making 20 urgent payments per month that could use any of the three methods:
| Payment Method | Cost per Payment | Monthly (20 payments) | Annual |
|---|---|---|---|
| ACH | $0.50 | $10 | $120 |
| RTP | $1.50 | $30 | $360 |
| Wire | $25 | $500 | $6,000 |
In this example, switching from wires to RTP for urgent payments would save $5,640 per yearwhile still providing near-instant delivery. If the payments are not truly urgent, ACH saves even more.
Bank Adoption: Who Supports RTP?
RTP adoption is growing but not yet universal. As of 2024, the RTP network reaches accounts at banks representing a significant portion of U.S. demand deposit accounts. Major banks supporting RTP include many of the largest national and regional banks.
To check if your bank supports RTP:
- Ask your business banker about real-time payment capabilities
- Check The Clearing House's RTP participant directory
- Ask about FedNow support as an alternative
The Future: Where Are Business Payments Heading?
The trend is clear: instant payments are becoming the norm. With both RTP and FedNow now operational, businesses will increasingly have access to real-time payment options. Over time, expect:
- Broader adoption: More banks will support instant payments
- Lower costs: Competition between networks should reduce fees
- Higher limits: Transaction limits are likely to increase
- More use cases: Instant payments will replace many wire transfer scenarios
For now, the smart approach is to use ACH as your default for routine payments, RTP when you need speed at reasonable cost, and wires only when truly necessary (large amounts, international, or when required by the recipient).
Summary: Choosing the Right Payment Rail
There is no single best payment method—each serves different needs:
- ACH: Best for cost-conscious, routine payments where 1–3 day timing works
- Wire: Best for large, urgent payments or international transfers
- RTP: Best for urgent domestic payments where you want speed without wire costs
Many businesses will use all three depending on the situation. Use our calculators to model your specific payment mix and find the most cost-effective combination for your business.