Payments breakdown: Instant, ACH and Same-Day ACH

posted on Monday, June 2, 2025 in SHAZAM Blog

Instant payments continue to gain momentum. Over 70% of U.S. deposit accountholders were eligible to receive instant payments thanks to over 1,500 financial institutions participating in The Clearing House^® RTP^® network, the Federal Reserve FedNow^® Service, or both. Both networks saw continued growth in volume of transactions and dollar values in Q1 2025.

With dollar values and volume of transactions continuing to grow as more organizations advance their instant payment offerings, could instant payments be a viable alternative to traditional payments? To answer that question, we’ll explore these payment types and why a significant number of instant payments transactions today appear to be displacing payments that have been traditionally serviced by ACH.

What are ACH payments?

The ACH system is a nationwide network through which financial institutions, and their retail/commercial customers, send and receive money transfers. It’s a common way for employees to receive their paycheck. Other common examples include government benefits like Social Security, tax refunds, and online bill payments. The ACH network reaches all U.S. bank and credit union accounts and is commonly how people receive their paycheck and pay their monthly bills.

There are two kinds of financial institutions in the ACH network, originating depository financial Institutions (ODFIs) and receiving depository financial institutions (RDFIs). The majority of them service both functions, which means they can both send and receive ACH payments. In an ACH payment, the ODFI sends a payment request, or entry, to an ACH operator. The ACH operator will transmit the entry to the RDFI, who, acting on behalf of the receiver, will complete the debit or credit request against the recipient’s account, and concludes with the settlement of funds between the ODFI and RDFI at the Federal Reserve.

What are Same Day ACH payments?

Same Day ACH is a faster option within the ACH network that allows for payments to settle within the same business day. There are three specific cutoff times for submitting Same Day ACH payments to ensure they are processed on the same business day. If the last window is missed, the payment will be processed in the next available window, which is likely to be the first window of the next business day. The payment process is the same as a traditional ACH payment described above.

What are instant payments?

Instant payments, often referred to as real-time or faster payments, are a method of electronic funds transfer that allows money to be transferred between financial accounts almost immediately, typically within seconds.

Instant payments allow consumers and businesses to send and receive funds from their accounts to banks and credit unions in real time, any time of day, any day of the year, with immediate funds availability to receivers, and immediate settlement between the financial institutions at the Federal Reserve accounts.

What is the difference between payment rails?

While ACH payments are account-to-account transfers, instant payments have the ability to be account-to-account, while faster payments can be push-to-card. However, there are differences in each form of payment. The chart below compares these payment methods.

Instant payments as an ACH alternative

Here are just a few of the use-cases SHAZAM is processing for our faster payments participants:

• Transfers from digital wallets and money management applications.
• Instant payroll deposits and same-day wage access, which is becoming a key employee benefit advertised on job search boards.
• Insurance companies that are paying disbursements for claims to policyholders.
• Public entities that are sending financial aid disbursements to students or other beneficiaries.

Beyond speed and convenience, instant payments allow individuals and businesses to make and receive time-sensitive payments on their schedule, giving them more flexibility to manage their money. This is important because employees and gig workers can immediately access money they’ve earned, allowing them to improve financial security and well-being. For businesses, providing this use case can allow them to attract and retain employees and improve employee experience. This helps businesses stay relevant and competitive while meeting the demand for faster and better payment methods. Instant payments also allow receiving financial institutions access to funds immediately in their master settlement accounts at the Federal Reserve.

Transferring funds instantly with SHAZAM

SHAZAM’s RTP and FedNow Credit Receive services enable financial technology organizations to create connected payment experiences that guarantee funds transfers, instant reconciliation, and availability of funds in real-time — 24/7/365.

The ITS Gateway is SHAZAM’s portal built into the U.S. Payments System. It provides immediate access to funds with a streamlined, efficient and secure financial pipeline for payments. By connecting into the ITS Gateway, you can link into multiple payment networks, allowing payments to be sent instantly. With one simple relationship, owned and operated by SHAZAM, we can provide you access to nearly every U.S. checking / savings account or debit card account. 

Contact us to learn how we can help your company take advantage of better payment availability to meet the evolving needs of modern consumers who expect quick and efficient payment solutions.

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SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.