Brian Moynihan CEO of Bank of America | Bank of America
Recent developments by The Clearing House have raised the transaction limit on real-time payments from $1 million to $10 million. This change is encouraging new business-to-business payment applications among Bank of America clients, with the bank being one of the first financial institutions to allow its corporate customers to utilize this increased limit.
Bank of America, as one of the owners of The Clearing House, contributed significantly to developing the RTP network in collaboration with other banks, technology firms, and the U.S. Federal Reserve. "Our clients have been using RTP to pay vendors, employees and customers, but the larger cap has opened up use cases for different kinds of transactions, such as real estate and deal closings and other corporate activity," said AJ McCray, head of Global Payments Products at Bank of America.
In just six weeks since implementing the new transaction limit, more than half of all U.S. real-time payments processed by Bank of America are over $1 million. Jay Davenport, co-head of GPS Global Corporate Sales at Bank of America noted that "the instant nature of real-time payments is a huge advantage for optimizing working capital and cashflow."
The RTP network operates continuously throughout the year without interruptions during holidays or weekends. It provides immediate settlement regardless of time and offers transparency into payment status for originators. Using ISO 20022 standards allows detailed remittance information to be included with payments.
As companies continue adopting real-time payments, they can explore various applications such as just-in-time supplier payments and complete real-estate transactions. Besides U.S. RTP network connectivity, Bank of America's clients can also access a full range of payment capabilities including commercial card services and transactional FX solutions.
Banking services offered by Bank of America cover 94% of Fortune 500 companies and 73% globally among Fortune 500 entities. It provides banking solutions across individual consumers to large corporations worldwide.