Two U.S. banks have conducted the first transaction using a new system that not only speeds transaction time from days to seconds but may make the U.S. a bigger global payments player.

BNY Mellon and U.S. Bank used the Real-Time Payments system to move $3.50 through two different accounts — for the same customer — at the two banks. RTP,  which is owned by American banks and was developed by The Clearing House (TCH), has several other applications, including e-invoicing, bill pay, and consumer payments.

The first transaction also carried data designed to make it easier for businesses of all sizes to reconcile their accounts more quickly and inexpensively.

“RTP is one of the most important payment transformation efforts in our industry,” Ian Stewart, CEO of BNY Mellon Treasury Services, said in a news release.

“It goes far beyond helping financial institutions address the legacy challenges of payment processing in the United States  (speed, transparency, cost) and improving the client experience,” he added. “Bringing online a truly real time, two way, 24/7 payment and messaging system will create new scenarios and entire new markets in ways we have not even anticipated.”

TCH developed RTP with technology from Mastercard-owned Vocalink. It is expected to be used by banks holding more than half of all deposits by the end of 2018 and to be “ubiquitous” by 2020.

For consumer uses like peer-to-peer payments, real-time settlement “adds convenience for users,” Business Insider reported. “But for business-based payments, like bill pay, emergency payroll, and others, it could be massive — in 2016, 53% of merchants believed faster payments implementation would have a positive impact.”

The system could also help the U.S. catch up with leading global payments players such as the U.K., which has been offering real-time payments platforms for several years. “Progress in the U.S. has been notably slower,” PYMNTS.com noted.

“Four years ago, the Fed began officially turning to banks, financial technology companies, businesses, and consumer groups to encourage them to find ways to speed payments,” it added. “The Clearing House began work on RTP shortly after.”

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