Real-Time Processing

What Is Real-Time Processing?

Real-time processing (also referred to as real-time computing) is when a computer or system runs data almost immediately. The rapid response ensures that processed information is instantly available to the user or intended application, providing insights in real time.

What Is Real-Time Payroll?

Real-time payroll is a system that processes and calculates employee wages and taxes as they're earned as opposed to waiting until the end of the pay period. Common pay periods for traditional payroll systems include weekly, bi-weekly, semi-monthly, or monthly.

In contrast, real-time payroll provides more immediate access to wages. Systems like this can support on-demand, or earned wage access (EWA), payroll programs.

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What Are Real-Time Payments?

Real-time payments are electronic, instantaneous funding transfers between two bank accounts. They can be carried out all year round—including holidays, weekends, and after-business hours—providing greater flexibility for consumers and business owners.

Instant payments run through systems like the Real-Time Payment (RTP®) network by The Clearing House or the FedNow Service by the Federal Reserve. These programs allow financial institutions to settle payments in real time, so people and businesses can send/receive money in seconds.

What Are the Benefits of Real-Time Payments?

Beyond technical speed, real-time payments yield several benefits for consumers, employees, and business owners, such as:

Peace of Mind

Other payment methods, such as checks, need two business days or more to clear. This delay can cause uncertainty and stress for employees and small business owners struggling to make ends meet. Real-time payments empower more people to address their most urgent needs and financial obligations.

Greater Transparency

Real-time payments reduce the amount of money delayed in processing. This transparency is mutually beneficial—it improves cash flow and liquidity management for employers, while giving employees a more up-to-date picture of their finances.

Improved Efficiency

When people send real-time payments, financial data transmits simultaneously, which helps administration run more smoothly. Employers can automatically reconcile payments, resolve errors, and reduce processing delays.

Increased Security

Once authorized, real-time payments are final. While beneficial for all employees, it can be especially helpful for independent contractors or gig workers who might otherwise be taken advantage of by their clients. Unlike checks, real-time payments can’t be stopped, making it more difficult to breach contracts.

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