Early Warning, of person-to-person app Zelle, and The Clearing House (TCH), operator of the processing platform RTP, have been planning on combining forces for faster settlement.
Today, Zelle transactions are messaged in and the recipient has access to funds immediately, but the settlement of funds between the sender’s and recipient’s banks is managed through ACH. This means that the recipient banks may incur some settlement risk as they wait for the next ACH batch.
Funds are guaranteed by the sender bank so the risk is managed, but as Zelle is used for larger and larger transactions–some in the millions of dollars–banks and credit unions can get a little uneasy. This is where TCH steps in to provide instant settlement between banks for Zelle transactions for those FIs who can receive RTP transactions