| HN Mirror

Real-time payment systems are common across the world and have been for well over a decade. It poses new challenges but usually you will not consider the fraud checks (AML or just standard TMS) outside the scope of that timeline. For example - instructing a payment to a “real time scheme” or even Real Time Gross Settlement (RTGS) does not mean you get it within that time period but rather it can be submitted and received.

For example if you send 100$ to a friend at another bank, you will submit the instruction, the bank will then screen it against an TMS/AML system, then once that passes 1 submit the instruction. If this time is say 10pm, you will be instructed first thing next day when the scheme opens again. In RTGS or similar real time systems, you get settlement within a shorter time period (like say a few mins to hours) meaning the next at someone will have it (pending receiving banks TMS/AML checks)

The real issue with this in the US is that they do not have a widespread account name confirmation service that is rolled out for all so it will be hard to do real-time “Confirmation of Payee” which is something that is relatively normal in other countries.

This is an oversimplification of most the steps but as a consumer, it will be a big benefit to speeding up the whole system as private networks like Venmo or Cashapp do the exact same thing (well to a lesser degree) but those services are built into the schemes themselves.