Optimize every transaction with a single platform that balances speed, coverage, and reliability.

Fintech platform success hinges on the ability to move money quickly and reliably. Employees expect payroll to arrive on time, customers expect instant access to funds, and vendors and suppliers expect to be paid without delay.

Yet the reality is more complicated. Electronic payments move across different rails with inconsistent settlement times, cutoff windows, and participation requirements, often resulting in delays and failed transactions. 

That’s where smart routing comes in. It evaluates available payment rails in real time — including Real-Time Payments (RTP), FedNow, and Automated Clearing House (ACH) — and directs each transaction through the optimal path. The result is fewer failed payments and a more dependable experience for customers and partners.

Key takeaways

• Common electronic payment options include regular ACH, same-day ACH, Real-Time Payments (RTP), FedNow, and in-network transactions through Priority’s Passport platform.
• Smart routing maximizes coverage and minimizes failed transactions by dynamically selecting the most efficient rail available.
• Key benefits of smart payments routing include faster settlement, greater reliability, and improved customer trust.

Types of electronic payment rails for smart routing

Fintech transactions run across a variety of electronic payment rails. Each one has its own speed, cost, and coverage profile, making different rails suited for different use cases. 

Smart routing evaluates these rails in real time to select the best available option:

Standard ACH

Standard ACH is the backbone of U.S. payments, powering everything from payroll to vendor payments. While regular ACH transactions typically settle in one to three business days, the method’s greatest strength is its reach. Nearly every financial institution in the U.S. can process ACH payments, making it a reliable choice for non-urgent transfers.

Same-day ACH

Same-Day ACH accelerates the standard ACH process, enabling day-of settlement when payments are submitted before the bank’s cutoff. Typically, that means mid-morning or early afternoon for arrival by end of day. 

While widely available, this option is still limited to standard banking hours. Miss the window, and the transaction won’t settle until the next business day.

Real-Time Payments (RTP)

The RTP network is operated by a consortium of major U.S. banks. It enables instant settlement with no cutoff times, including nights, weekends, and holidays. 

However, both the sender and recipient banks must participate in the RTP network for a transaction to go through. Although adoption is growing, many smaller banks and credit unions do not yet support RTP.

FedNow

Launched by the Federal Reserve in July 2023, FedNow expands access to real-time payments, especially for community banks and credit unions. Like RTP, FedNow offers 24/7/365 settlement without cutoff windows. However, both the sender’s and recipient’s banks must be enrolled in FedNow for payments to process successfully.

In-Network Transactions with Passport

Sometimes the fastest option doesn’t involve external rails at all. Priority’s banking and treasury management platform, Passport, enables account holders to move funds directly to any other account within the system. 

These Passport-to-Passport transfers settle in as little as one minute, with no network fees or third-party delays. The only requirement is that both parties must hold Passport accounts.

How does smart payment routing work?

Smart payment routing works by automatically directing each payment through the fastest rail that will succeed. To do this, the system evaluates multiple factors in real time, including submission timing and bank participation in programs like FedNow and RTP. 

For funds moving between two Passport accounts, Passport-to-Passport will always be the fastest option. For all other scenarios, here’s how the smart payment routing process works:

1. Attempt real-time rails (FedNow and RTP): If both banks participate in one of these networks, the payment clears within seconds and funds are available immediately.
2. Fallback to same-day ACH: If neither real-time option is available, the system defaults to Same-Day ACH, provided the transaction is submitted before the daily cutoff.
3. Default to standard ACH: As a last resort, the payment routes through standard ACH, settling within two to three business days.

Power every payment with speed and coverage

Instant, reliable payments have become the standard, yet no single rail delivers the speed and reach your business demands. Priority’s Banking & Treasury management platform, Passport, bridges the gap with smart routing. 

Passport intelligently combines the speed of RTP, the reach of FedNow, the reliability of ACH, and the efficiency of platform-native transfers to ensure every transaction follows the fastest, most dependable path. By embedding smart routing into your payment flows, your fintech gains the consistency and flexibility essential in today’s digital banking economy.

Ready to see smart routing in action? Get in touch to learn more.