Get Ready, Finance World! Why OBO on the RTP Network Matters

If you've been riding the RTP^® rails with The Clearing House, you know it's all about near-instant movement of funds, with immediate availability to the receiver, settlement at the time of the transaction, and clear communication between all parties.

With new rules effective April 16, 2026, RTP is rolling out something brand new: “On Behalf Of” (OBO) functionality. Think of it as the electronic, permission-granted version of “Hey, can you give Joe this ten bucks for me?” but built for businesses who move money for others.

I’ll try to break it down without getting all the way into the ISO messaging weeds.

What Is OBO?

With OBO, someone can now send a payment on behalf of someone else.

This is huge for platforms, fintechs, payroll processors, or even businesses handling bill pay services. OBO means you can handle payments for consumers and businesses directly through the RTP network, and everyone involved will understand who sent the payment and on whose behalf it was sent. This transparency works because recipients need to know the "why" behind every transaction.

Cheers to all the bankers breathing a sigh of relief.

Now you won’t have to answer all those questions when it just says “Venmo” without the addition of sweet Aunt Charlotte’s name as sender. (When did she learn to do that anyway?)

Use Cases That Actually Make Sense

Let’s say you’re a transportation platform like DriveBigTrucks.

You collect COD payments from customers and pay drivers. With OBO, you (DriveBigTrucks) can send RTP payments to drivers on behalf of the actual customers. Now your drivers get their money with immediate availability, and RTP messages reflect both the platform’s name and that of the real payer.

Another example is a payroll service like PayInAFlashPro. They process Friday paychecks for hundreds of companies. Before OBO, every company had to have its own RTP setup, and the money had to come from the company’s account. Now PayInAFlashPro can push out those direct deposits from their own account using RTP, clearly stating “This is from CoolStartup Inc., sent by PayInAFlashPro.” No ambiguity. No confusion.

Key Rule Changes for OBO on the RTP Network

Here’s the gist:

Transparency is king: Legal names only. RTP messages must clearly identify both the actual payer and payee.

No disguises: You can’t manipulate payment details to disguise identities. Cross-border payments pretending to be domestic? Nope.

Keep it simple: Only one payer and one payee. It’s not for daisy chains or nested middlemen.

Participant responsibilities: If you’re part of the RTP network and planning to support OBO activity, it's time to step up your game. You’ll need:

1. Due diligence protocols for those initiating OBO payments.

2. Solid internal controls to track and manage this activity.

3. Updated agreements that include fraud reporting obligations because fraud reporting now has to come from the Sending Service as well as the financial institution participant.

Oh, and The Clearing House isn’t playing around.

If you’re sending OBO payments, they can require you to get a third-party audit to prove you're playing by the rules. Consider yourself warned.

Why OBO Functionality Matters for Instant Payments

The new OBO framework gives RTP a cleaner, clearer way to handle third-party scenarios.

By baking transparency and control into the rules, RTP is making sure innovation doesn’t come at the cost of security or clarity. It’s like opening the door to more flexible use cases without compromising the integrity of the network.

Final FPO Thoughts

So, while it may be the addition of a few new fields in the PACS.008 message, the new OBO rule is a milestone for RTP participants and payment processors alike (oops, I did get a mention of an ISO20022 message type in there). Whether you're already sending on behalf of someone or just exploring new use cases, OBO functionality is your new playground. But only if you play by the rules.

Full compliance with the new data requirements is expected by April 16, 2026, so take the time now to talk to your processors, tune your controls, and make sure agreements are buttoned up.

And hey, if you’ve ever asked a pal, “Can you just get this to Joe for me?” Congrats. RTP just made it digitally easier.

Not yet on the RTP Network? There are more benefits this instant payments rail for you to consider.