GuidesSep 24, 20263 min read
Instant payouts are a rail, not a feature
RTP and FedNow get described as faster ACH. They are not. They are different networks with different rules, and knowing which one a contractor is on explains almost every “where is my money” email.
Maren Holt
Head of Payments Operations
When a contractor tells you they were paid “instantly,” they mean the money was spendable in their checking account a few seconds after you approved the run. That feels like a feature of the app you used. It is actually a property of the network the payment travelled on, and of whether their bank is connected to it.
There are two instant networks in the United States today. RTP is run by The Clearing House, a company owned by the largest US banks, and has been live since 2017. FedNow is run by the Federal Reserve and opened in 2023. Both settle each payment individually, in real time, every day of the year, including weekends and holidays. Neither batches anything.
What ACH does differently
ACH, by contrast, is a batch system. Payments are collected into files and exchanged between banks at set windows during the business day. Same-day ACH means your payment made one of the earlier windows and the receiving bank posts it before the end of its day. Standard ACH means it settles the next business day, sometimes two.
That difference is not a matter of speed settings. An ACH payment approved at 6:00 PM ET on a Friday cannot arrive until Monday, because there is no window to put it in. An RTP payment approved at the same minute arrives at 6:00 PM ET on Friday.
Why not every contractor gets instant
A bank has to join a network to receive payments on it. Most large banks receive on RTP. A fast-growing number of community banks and credit unions receive on FedNow, often through a processor. Some institutions are on both, some on one, and a meaningful number are on neither yet.
On Pinnacle today, about 73% of the checking accounts our customers pay can receive an instant payment. The rest are reached over same-day ACH. That number was 61% eighteen months ago and goes up nearly every month as credit unions join FedNow.
- RTP reaches most accounts at large and regional banks.
- FedNow fills in many credit unions and community banks that RTP does not reach.
- Same-day ACH reaches every US checking account, on the network's schedule.
How Pinnacle picks
Before a run goes out, we look up each contractor's routing number against the directories both instant networks publish. If their bank receives on RTP, the payment goes RTP. If it receives only on FedNow, it goes FedNow. If it receives on neither, it goes same-day ACH, and the contractor's receipt says so.
There is one more case worth knowing about. A bank can be listed as reachable and still decline an individual instant payment — a closed account, a limit, a fraud hold. When that happens we do not return the money to you and make you start again. The payment is retried over same-day ACH automatically, and the run's log shows both attempts.
The question to ask is never “is this provider instant?” It is “which of my contractors' banks are on which network?”
What this means for your team
If you pay a crew in Austin whose banks are mostly large nationals, nearly everyone will be paid in seconds. If you pay home-health nurses across rural Ohio, more of them will bank at credit unions, and more will be paid same-day ACH — though that share is shrinking quickly.
Either way, the useful move is to stop promising contractors a speed and start showing them one. Every Pinnacle receipt names the rail a payment took and the minute it landed. The emails asking where the money is drop off sharply once people can see that for themselves.
