RTP stands for Real-Time Payments and is the newest way for businesses to move money online. It speeds up bank transfers in a cost-effective manner, reduces transaction risk by eliminating payment reversals and returns, and allows for richer context to be attached to payments like reservation details or invoice numbers.
RTPs are instant payments processed directly between banks and can take seconds to complete – as opposed to the hours or even days that can sometimes pass before traditional systems settle. This makes them ideal for ecommerce, software-as-a-service (SaaS), and other industries that require immediate confirmation of funds transfer to allow customers to start using the product or service they’ve purchased.
How Does RTP Slot Work?
RTP is a protocol for transporting packets that are used for applications where reliability is not a critical requirement. For example, video streaming services often use RTP to send data packets between servers and clients, with the knowledge that a few lost packets can be corrected with retransmission. This is a very different paradigm from HTTP, which can download an exact copy of the original file and requires an extra level of reliability.
When it comes to banking, a lot of people think about ACH and wire transfers when they hear the term “real-time payments”. While these methods are still widely used and offer many benefits, there are new options available that can provide a faster, cheaper, more reliable, and more secure way for companies to move money online.
One of these is RTP, first launched in 2017 and managed by The Clearing House. RTP is the newest electronic payment method that allows any federally insured depository institution to participate in the network.
RTP uses the User Datagram Protocol (UDP) rather than Transmission Control Protocol (TCP). UDP is connectionless and does not guarantee that all packets will be delivered in order, but it is very fast and ideal for applications where speed holds priority over absolute reliability. In addition to using UDP, RTP also has a unique header structure that contains a variety of useful information about the payload it is carrying. These header fields include the length field indicating how long the payload is, the CSRC count identifying all the CSRCs in the payload, the marker bit which has various meanings depending on the type of payload (e.g., frame boundaries in video or the first non-silence audio after a period of silence), and the payload type which lets the receiver match the packets to a codec configuration negotiated in SDP.