What does rails mean in payments?

"Rails" in payments refer to the infrastructure facilitating money transfer. It's the pathway for funds between financial institutions.

An example of the flow of funds for an ACH payment

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Payment rails are the underlying systems and networks that facilitate the movement of funds between parties in financial transactions.

In the US, common payment rails include ACH (Automated Clearing House), FedNow, checks, RTP (real-time payments), wire transfers, and card networks like Visa and Mastercard.

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A payment gateway connects merchants and payment processors, while payment rails are the actual systems moving money. Gateways facilitate transactions over different rails.

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No, PayPal is not a payment rail; it uses various payment rails like ACH, card networks, and internal transfers.

No, Stripe is not a payment rail but employs various rails, such as ACH and card networks.

The most popular retail payment method in the US is card payments, especially credit and debit cards.

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is not a payment rail itself but a messaging network facilitating secure communication between banks globally.

Wire transfers are generally faster than ACH. While ACH transactions may take 1-2 business days, wire transfers often occur on the same day.

Blockchain is not a traditional payment rail but a decentralized ledger technology. However, certain blockchain networks, like those supporting cryptocurrencies, can be considered as alternative payment rails with unique features.