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Real-Time Payments: A Business Owner’s Guide to Current Tech

By Joe

Real-Time Payments

Recently, we’ve been reviewing popular online banks, and I noticed a trending issue: Many business banking offers are incompatible with Zelle — it’s hanging people up. But, there’s a promising technology that might give Zelle and other P2P payment platforms a run for their money: Real-Time Payments. 

Here, I break down what I know about this tech and how real-time payments could revolutionize small business banking. 

Here’s what’s in store:

  • What are Real-Time Payments?
    • The Clearing House Company Overview
    • How Do Real-Time Payments Work?
      • Real-Time Payments Features
      • Where are Real-Time Payments Available?
      • What is the Difference Between ACH and RTP?
  • Which Banks Offer Real-Time Payments?
    • Do All Banks Accept RTP?
  • Frequently Asked Questions
  • Summary

Now, let’s roll! 

What are Real-Time Payments? 

RTP® is a new, mobile-ready, instantaneous payment platform from The Clearing House. The platform has been available to its Real-Time Payments Network (participating banks and credit unions) for five years. 

Recently The Clearing House announced some exciting changes: 

  • Higher volume capabilities
  • Expanded technical access
  • Enhanced fraud prevention
  • Improved invoicing functionality 
  • New banks onboarding weekly  
Real-Time Payments wiki

The platform has grown from 2 participating banks at the onset of 2017 to 62 in October of 2020, and engagement has since exploded — As of November 2022, 285 banks have signed on to offer RTP to their account holders.

You might also like: What’s the Best Payment Processor for a Small Business? Really

The Clearing House Company Overview

The Clearing House Payments Company, LLC, also known as THC, is a New York-based payments company, established in 1853 — it’s the oldest banking association and payments company in America. TCH is owned by the largest commercial banks, responsible for more than half of the country’s deposits. 

The company provides payment, clearing, and settlement services to its banks and third-party financial institutions. THC is responsible for almost half of all funds-transfer and check-image payments in the United States, which total nearly $2 trillion daily. 

TCH employs 479 LinkedIn members, led by the current CEO, James Aramanda. This is an established, well-trusted company with a highly-impressive track record. 

How Do Real-Time Payments Work? 

How does RTP payments work?

On the user end, RTP enables consumers and businesses to receive funds almost instantly through their banking platform. With RTP, the time between a payment request and settlement takes seconds. 

We’re not talking about ACH or same-day payments here — RTP is lightning-fast. 

As a business owner, this feature can give you instant access to cash flow, which changes the game entirely: no more waiting 24-72 hours or longer to receive your funds. 

Traditional payment communication is a one-way street in the way that transaction information is sent from the sender to the receiver. Now, RTP provides a gateway for two-way, inter-institution data (and funds) transfer in one transaction…instantly. 

This not only gives you “real-time” access to money, but helps enhance trust, improve cash flow, and increase your level of financial control.    

Real-Time Payments Features

There are a few standout features of RTP worth noting. 

→ Transactions are final — RTP transactions can’t be reversed. This can be a risk for the sender, so there are some use cases for which RTP isn’t a good fit (this isn’t to say that any billable goods or services can’t be refunded at the discretion of the receiver).  

→ Account numbers are protected — Secure Token Exchange via DDA tokenization now issues tokens that represent real account numbers when the RTP system sends or receives payments. So, there’s less risk of potential fraud within the system. 

→ Internal communication is an option — PDF and XML documents are newly-available assets within the RTP platform; users can now send bills, invoices, and remittances as part of real-time payment requests or follow-up messages. 

Where are Real-Time Payments Available? 

Real-Time Payments Countries

75% of banks in the United States with demand deposit accounts (DDAs) have access to the RTP network, and 60% of them are taking advantage of the offer currently (see which banks offer RTP below). TCH’s payment platform is currently only available within its own network, hence available only in the U.S. 

Keep in mind, however, TCH’s RTP is not the only real-time payments solution. In fact, there are several similar systems emerging worldwide. 

First, Zelle is a household name that offers instant payments between banks. Again, many business bank accounts aren’t Zelle-enabled, which can be frustrating. 

Next, the Federal Reserve is working on FedNow, a lightning-fast payment solution that will be available for select institutions soon. Note that the speed at which banks are signing on makes it appear that RTP’s reach might continue to surpass the Federal Reserve’s upcoming real-time payments system. 

Furthermore, according to ACI, India is the global leader in real-time payment options. So, there are comparable systems available globally — maybe 50 or so across the world, with varying capabilities. 

What is the Difference Between ACH and RTP? 

Real-Time Payments vs ACH

ACH and RTP are not one in the same. While both of these systems offer a way to complete a transaction quickly, that’s where the similarities end. 

≠ Between the two systems, there are differences in speed. 

ACH can take several hours or days, and that’s if the sender chooses “same-day ACH” at the time of the transaction. 

RTP, on the other hand, processes payments instantly; this means that the recipient receives the funds within a few seconds after they are sent. 

≠ RTP is “alwasy on.”

ACH payments are completed at the discretion of the institution. Hence, they’re subject to unavailability outside business hours, on weekends and holidays, and based on batch cutoff times. 

On the contrary, RTP payments can be made at any time — 24 hours a day, 7 days a week, 365 days of the year. Any time a payment is sent, it will be received right away. 

≠ The type of available payments vary with ACH and RTP. 

Debit and credit transactions can be processed via ACH. So, funds can be transferred via either type of process. 

With RTP, however, all transactions are processed as credit. Note that many merchants process all payments as credit — this doesn’t mean you can’t use a debit card to send real-time payments.  

≠ RTP enables institutions to send more remittance data. 

With ACH transactions, the remittance data sent with the payment is limited to 80 characters. Both institutions will have access to a very short amount of text to explain the transfer. 

And, with RTP transactions, up to 140 characters of remittance data is allowed. Institutions can share a bit more data about the funds being sent and received with RTP than with ACH. 

Which Banks Offer Real-Time Payments? 

All of the federally-insured depository institutions are eligible to participate in RTP, and 285+ institutions currently take advantage of the system. Some names include big banks like Wells Fargo, US Bank, Bancorp, and BMO along with less-known companies like Regions, Bank of the West, and Security Financial. 

With this, I know at least one online “neobank,” NorthOne, takes part via their servicer, Bancorp Bank. There are countless smaller institutions and financial offers that partner with more established institutions to provide both consumer and business financial solutions. So, there’s no telling for sure how many accounts are RTP-enabled.     

With that said, these numbers are likely to grow, as the Real-Time Payments technology has only been around for about five years, and was recently launched. 

Do All Banks Accept RTP? 

Real-Time Payment received

We’ve just highlighted some of the banks that participate in RTP, which leaves us with another question: If your bank offers RTP, will the receiving bank be able to accept an instant payment, even if they’re not in the Real-Time Payments network? 

The short answer is “no.” As with Zelle and other real-time payment processing solutions, both institutions — the sender and the receiver — must have the system enabled for RTP transactions to be completed instantly.

When the receiving bank is not RTP-ready, and an RTP payment is sent, the recipient will get their funds within the next available ACH deposit window. 

Fortunately, a large percentage of banks in the U.S. are now RTP-enabled.  

Frequently Asked Questions

Is RTP a direct deposit?

Real-Time Payments are technically a type of credit transaction, not an ACH direct deposit. However, employers and others sending funds can use RTP in many of the same use cases as a direct deposit has traditionally been used. 

Do banks charge for RTP?

Banks are charged by The Clearinghouse (about 5 cents per transaction), so they may choose to charge account holders to take advantage of this service, yes. 

Will RTP replace ACH?

As more institutions sign up and get acquainted with the RTP system, it could replace ACH as a method to send funds, maybe. But, since RTP cannot be used to collect funds, it is not likely to replace ACH altogether. 

Is RTP cheaper than ACH?

RTP costs banks less than 5 cents per transaction, which might be less than the costs for processing ACH. However, fees are charged at the discretion of the institution and banks may charge more for their account holders to use RTP than they charge for ACH. 

Is RTP a wire transfer?

In a word, no. RTP is not a wire transfer — by definition, Real-Time Payments are credit transactions. 

Is Zelle Real-Time Payments?

Zelle offers a solution to process payments in real time. However, Zelle and the Clearinghouse’s RTP are separate systems. Just because an institution offers RTP does not mean that it offers Zelle and vice versa. 

Is Venmo an RTP?

Venmo is a peer-to-peer payment solution that offers instant access to cash, but it is not part of the Real-Time Payments network. 

Summary

Who needs Zelle when you’ve got Real-Time Payments? While the system is still in the early stages, RTP offers institutions and their account holders an opportunity to send payments that can be received instantly. 

Check with your institution to see if they’re part of the real-time payments network and find out how you can take advantage of the system to pay your employees, square up with suppliers, and take care of your bills. Are you a business owner interested in learning more about the best banks to work with, and ways to grow your company? You might be interested in learning how to obtain up to $100K in business credit in as few as 30 days. If so, join Business Credit Workshop today.

Bank of America Corporate Cards: A Complete, Uncut Review

By Joe

Bank of America Corporate Card

Bank of America is one of the largest banks in the United States, with robust financial offers for consumers and businesses. One popular business product from Bank of America is their corporate cards — here, we examine this offer in full (note: we’re not talking about the small business credit cards). 

We’ll look at the benefits and the downsides of BoA’s corporate cards, and, by the time you’re done reading, you’ll know whether it’s right for you (or if you should explore other offers). 

Here’s what’s covered: 

  • What is a Corporate Card?
  • What is the Bank of America Corporate Card?
    • Benefits of BoA’s Commercial Prepaid Cards
      • Accounts Payable Automation Overview
      • Lounge Access Overview
      • Airport Fast Track Credit Overview
      • Arts & Culture Benefits Overview
      • Dinova™  Rebates Program Overview
  • Bank of America Business Credit Cards
  • Frequently Asked Questions
  • Final Thoughts

Now, let’s begin. 

What is a Corporate Card? 

Before we dig into Bank of America’s offer, how do corporate cards work? 

Typically, businesses with substantial revenue can obtain corporate cards to improve cash flow and track spending. With corporate cards, credit lines are issued to a corporation or business entity, not the business owner. 

Not just any business can get a corporate card, though. The requirements are typically strict, based on revenue (usually in the millions) and expenses (typically in the hundreds of thousands), creditworthiness (credit score), and sometimes require several cardholders to qualify. 

Recommended: Corporate vs. Business Credit: What’s the Difference?

In many ways, corporate cards are like other credit cards. Businesses might need a corporate card in order to keep track of expenses and employee spending, and/or to get quick or easy access to funds to grow or maintain operations. 

Corporate cards vary from personal cards in the way that the business, not the individual is responsible to maintain the account and pay the balance. And, corporate card terms often require that the balance is paid in full each billing cycle, whereas most traditional personal credit cards have revolving terms. 

When corporate card payments are reported to credit bureaus, corporate credit cards can impact the business’ credit score, for better or worse. On-time payments on a corporate card typically help increase the company’s business credit score(s). 

Finally, corporate cards should typically not be used for personal expenses. While using a business card to pay a personal expense is not always illegal, there can be tax implications and it could be a violation of the cardholder’s fiduciary duty to the company. 

Now, let’s look specifically at Bank of America’s corporate card offer. 

You might also like: Using 30-Day Net Vendors to Build Your Business Credit Score 

What is the Bank of America Corporate Card? 

Bank of America services several business credit cards — a handful of small business credit cards and a commercial prepaid credit card. The commercial prepaid card is the most similar to a typical corporate card, but it is not really a line of credit. Cash must be deposited to the card before the funds can be accessed.  

You may have received a pre-approval offer from BoA for a business credit card, which is how you ended up here. In this case, note that we’re exploring an entirely different offer. 

Bank of America Business Credit Card Preapproval

The idea behind prepaid is that businesses can leverage digital payments for purchases anywhere Mastercard or Visa cards are accepted, withdraw cash at ATMs, and go about their day without carrying large amounts of cash while protected from fraudulent financial activity via BoA’s zero liability policy.  

Bank of America’s prepaid cards are widely used in government programs like unemployment and child support, and the fees are a little steep. The bank tends to charge $2-5 per transaction, which is determined on a case-by-case basis, depending on your account needs. 

Unlike some corporate card programs, prepaid card use is not reported to credit bureaus, so if you opt to join the BoA commercial prepaid program, there will be no impact on your business’ credit score. 

Recommended: Brex Card Review: Is This Corporate Card Too Good to be True? 

Benefits of BoA’s Commercial Prepaid Cards

If you have to pay in advance, and payments aren’t reported to business credit bureaus, why would you want to take advantage of a commercial prepaid card system? BoA offers more than a handful of benefits for companies and staff cardholders with its prepaid cards. Like corporate credit cards, BoA’s prepaid cards are intended to help you manage cash flow and come with other perks. 

If you choose to leverage BoA for this purpose, here’s what you’ll get. 

The business benefits: 

  • Comprehensive payables – Business owners who use Bank of America’s prepaid cards can utilize automation for their payables system, to save time. In turn, this feature can save companies a lot of money. 
  • Secure, fast purchases on the go – Take advantage of secure purchases using your mobile wallet platform with Bank of America prepaid cards to make in-person payments throughout North America, Europe, and Asia Pacific. 
  • Virtual travel cards – Virtual cards can be used with cardholders’ mobile wallets and make it easier for travel coordinators to implement spending limits and access travel data for accounting and reports. 
  • Complete accounts payable – Members also get access to Bank of America Complete AP, which automates the entire accounts payable cycle, from invoicing and receipts to payment processing. The platform can be integrated into your enterprise resource planning system to help reduce paper and manual processes.  

If your business involves travel, especially for multiple staff members, you can see how these cards might be a great idea, even if they come with no traditional line of credit. 

The cardholder benefits: 

  • Global card access – Cardholders get visibility, convenience, and control with Bank of America’s Global Card Access, and can manage their prepaid cards from anywhere they can connect to the internet. 
  • Contactless payments – When it comes time to pay for goods and services, BoA prepaid cards can be used with any functioning contactless payment system — these systems continue to grow in demand and implementation. 
  • Executive Explorer Card – For an additional $375 per year, executives at your company can leverage advanced card perks, including $600 Lounge Access credit and $100 Airport Fast Track credit per year. 
  • Dining and entertainment perks – The “Benefits on Us” (just a catchy title) gives BoA commercial cardholders free access to over 225 cultural institutions across the US, and rebates on in-network dining via Dinova.™ 

The most notable perks seem to be dining and entertainment, so let’s explore those a bit further. 

Accounts Payable Automation Overview

Bank of America Complete AP

Bank of America’s “Complete AP” launched in April 2021, and is included with commercial prepaid accounts. According to BoA, the platform can easily be integrated with “nearly any” existing enterprise technology. 

I know for sure that the platform integrates with Quicken, Quickbooks, and MyPortfolio. If you use another technology, you might have to reach out to a sales rep to make sure that your platform will integrate easily. 

Next, with Complete AP as a standalone system, you have several automation options: 

  • Capture and digitize supplier invoices
  • Route invoices for coding and approval
  • Visibility & control of invoices & payments
  • Organized payment queues 
  • Payment approval alerts & audits 
  • Automated payments (via supplier’s preferred payment method)
  • Communication with suppliers
    • Account validation
    • Network enrollment
    • Payment preference controls
    • Payment research & support
  • Currency exchange
  • Cross-border payment tracking 

And, as of August 2022, Bank of America was scouting a new software integration developer. This tells me that the company is definitely building out its technology offer, and there will be more automation features and integrations to come.  

Lounge Access Overview

Bank of America Business Debit Card benefits

Many business travelers stop in at airport lounges for more comfortable layovers, including snacks, beverages, and showers (some of them even have swimming pools, massage, and fitness centers). Lounge Access with a BoA Executive Explorer Card is limited, but the lounges that credit may be spent on are some of the most popular: 

  1. Admiral’s Club by American Airlines
  2. Alaska Lounge by Alaska Airlines
  3. Delta Sky Club by Delta Airlines
  4. United Club by United Airlines 

If your executives utilize any of the above lounges, and individual spending is in excess of $375 per calendar year, you could save hundreds by taking advantage of the Explorer Card offer alone. 

Airport Fast Track Credit Overview 

BoA Business Advantage Credit Card perks

The $100 Fast Track statement credit per Executive Explorer card, per year can be used for a few different airport purposes.

  1. TSA Precheck
  2. Global Entry  
  3. Nexus
  4. Registered Traveler

Again, this perk is only available with the Executive Explorer card, which costs $375 per year — it is not included with every business prepaid card from BoA. So, while it’s a great perk to offer, it is best leveraged by individual staff members who will also take advantage of Lounge Access credits. 

Arts & Culture Benefits Overview

Global Access Card Bank of America Benefits

Available with all BoA prepaid cards, Arts & Culture benefits are fun for anyone who might find interest in visiting museums on pitstops while traveling for business. With a BoA, cardholders get complimentary access to hundreds of museums and cultural centers in the United States. 

For a full, updated list of participating organizations, visit BoA’s Museums on Us participant roster. 

Note that this perk can be leveraged by any BoA cardholder during operating hours and can only be used during certain weeks each month — you’ll have to check with the facility to find out if your travel aligns with the dates and times that you can cash in on the perk. 

Dinova™  Rebates Program Overview

Bank of America Global Access Card Login benefits

There are over 20K restaurants in Dinova’s network. And, with BoA prepaid cards, businesses earn rebates on all in-network cardholder spending, and cardholders can earn individual points that can be exchanged for gift cards. 

There’s no need to offer incentives to staff to take advantage of these perks, since BoA does that for you through their individual rewards program. And, Executive Explorer cardholders (owners and executives) get 2X points. 

Bank of America Business Credit Cards

At this point, if you’re not interested in a prepaid card, you might find what you’re looking for with one of BoA’s business credit cards. Here’s a quick summary of what’s available. 

APRAnnual FeeRewardsIntro Offer
15.99 to 25.99%$01.75% to 5.25%0% APR for 9 mos$300 bonus
15.99 to 25.99%$01.5% unlimited0% APR for 9 mos$300 bonus
15.99 to 25.99%$01.5 points per $130K bonus points
19.74% to 27.74%$50 +$25 per card$121 Companion Fare™ Free checked bag3 miles per $140K bonus miles

For even more options, see the full list of BoA small business credit cards. 

Frequently Asked Questions

Is it hard to get a Bank of America card?

Generally, a BoA credit card account requires a credit score of 750 or higher. However, there are quite a few perks to be leveraged with prepaid or “corporate” cards, which have no credit score requirements. Of course, you must be at least 18 years old and have a valid SSN or ITIN. 

Which FICO score does Bank of America use?

Typically, BoA uses Experian to pull credit but can get some information from Equifax and Transunion as well.  

What credit score is needed for a Bank of America business card?

A personal credit score of 750 may be required, even for a business credit card. However, corporate prepaid cards have no strict credit score requirements. 

Final Thoughts

Bank of America has quite a few options for business owners looking to optimize their corporate cash flow. If you’re a high-revenue company, interested in perks related to travel, arts & culture, or dining, they may have a corporate offer for you by way of their prepaid cards system. If you’re looking for lines of credit, there might be a BoA business credit card that would be great for you. 

BoA’s business offer is pretty traditional, but there’s nothing boring about it. If you liked what you learned here, and saw something that would be beneficial for you, I recommend you chat with a BoA sales rep to find out what might be best for you at this time. I can’t knock the offer. 

But, if you are interested in a corporate card offer that’s more innovative — maybe something with more tech perks — I’ve done a handful of reviews of other corporate cards that you may want to see: 

  • Amazon Corporate Credit Line – The Ultimate Guide
  • Have You Heard About the Free Stripe Corporate Card Cashback Benefits?
  • Brex Card Review: Is This Corporate Card Offer Too Good to be True?
  • Ramp Credit Card Review: Is This the Corporate Card for Your Business?
  • In-Depth Divvy Credit Card Review: Read This Before You Apply 
  • A Complete Torpago Business Credit Card Review

And, if you want to learn how to obtain up to $100K in business credit (won’t affect your personal credit) in as few as 30 days, join business credit workshop today.

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