What is Real-Time Gross Settlement (RTGS)?

Introduction and system fundamentals

RTGS systems are designed to process and settle transactions individually and in real time. Each payment is settled as soon as it is initiated, without being grouped or netted. Once completed, the settlement is final and irrevocable.

These systems are typically operated by central banks and used for high-value or time-critical payments such as interbank transfers and corporate treasury movements. They form the backbone of a country’s financial infrastructure by ensuring funds transfer is immediate and with finality.

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RTGS vs. deferred net settlement: the core trade-off

The main distinction lies in the timing and funding of settlement.

In an RTGS system, each participating bank holds a settlement account with the central bank. The system debits the payer's account and credits the recipient's account in real time, with no waiting period for batch clearing.

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• RTGS advantage: RTGS offers the highest possible speed and settlement certainty, eliminating the credit and settlement risk present in deferred systems.
• RTGS constraint: Operating on a gross basis means each payment must be fully funded at initiation. This creates higher liquidity demands for participants compared to net settlement systems (such as ACH or SEPA Credit Transfer), which aggregate transactions and settle them in bulk.

To manage this, RTGS systems are built for reliability and speed, offering features like queue management and central bank intraday credit lines to help participants manage short-term liquidity demands.

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Examples of RTGS Systems

Nearly every major economy operates its own RTGS infrastructure. Prominent examples include:

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• TARGET Services (T2, the successor to TARGET2) in the European Union
• CHAPS in the United Kingdom
• Fedwire Funds Service in the United States
• LVTS (replaced by Lynx) in Canada
• RTGS in India
• HKD CHATS in Hong Kong
• BOJ-NET in Japan

Many of these systems are evolving toward ISO 20022 message standards and 24/7 operational capability to support real-time global commerce.

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Benefits and Treasury Management

RTGS offers maximum speed and settlement certainty. Payments are final once processed, eliminating counterparty risk and supporting time-sensitive transfers.

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For businesses receiving RTGS payments, the immediate, final arrival of funds improves liquidity and reduces reliance on short-term credit.

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For treasury teams, RTGS directly impacts intraday liquidity management. High-value corporate transfers are routed through RTGS to guarantee immediate value. Because RTGS payments settle in real time, they enhance cash visibility—balances reflect true, settled positions rather than pending transactions. This accuracy improves cash positioning, forecasting, and funding decisions, ensuring sufficient balances are available ahead of payment initiation to prevent delays.

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How Atlar can help with RTGS Visibility

Atlar connects directly to banks and payment systems, providing real-time visibility into outgoing and incoming RTGS payments. Treasury teams can see when high-value transfers are initiated, settled, and reflected in account balances without waiting for end-of-day updates. With automated reconciliation and real-time cash positions, Atlar helps businesses manage liquidity more accurately and confidently, even when operating across multiple RTGS systems and currencies.