As real-time payments (RTP) adoption accelerates in the U.S., financial institutions are navigating the evolving landscape of instant payments, including the Federal Reserve’s FedNow and The Clearing House’s Real-Time Payments (RTP) Network. A recent webinar brought together industry experts, including Matthew Brazda (Bank of New York), Anoop Basavarajaiah (Volante), and Elisa Tavilla (Javelin Strategy & Research), to discuss adoption trends, interoperability challenges, key use cases, and the future of real-time payments.

The current state of instant payments

The U.S. real-time payments ecosystem has evolved significantly, yet ubiquity remains a challenge. Panelists highlighted that while FedNow has onboarded more financial institutions, RTP still leads in account reach, covering approximately 70% of U.S. accounts compared to FedNow’s 30%.

FedNow’s rapid adoption is due to its existing relationships with U.S. banks, simplifying onboarding. Meanwhile, RTP, which launched earlier, is expanding its reach among smaller community banks and credit unions. Additionally, transaction limits are increasing, with RTP set to raise its cap to $10 million (versus FedNow’s $500,000), unlocking large B2B and corporate transactions.

Financial institutions must strategically assess which network to adopt—or consider integrating both—to maximize reach and functionality.

Why real-time payments matter to the banking & payments industry

Real-time payments do more than speed up transactions—they modernize banking by reducing reliance on slow, batch-based systems like ACH and wire transfers. They enhance customer experience with instant payroll deposits, insurance payouts, and P2P transfers while improving cash flow for businesses.

Beyond speed, RTP mitigates risks by reducing fraud exposure, overdraft fees, and payment delays. It also strengthens fintech-bank collaboration, as fintechs drive API-powered innovations, pushing banks toward modernization.

As real-time payments become the industry standard, early adopters will gain a competitive edge, while laggards risk falling behind more agile competitors.

Use cases driving instant payment adoption

The ability to send and receive funds in real time enhances cash flow, reduces processing costs, and improves overall efficiency. Below are key use cases driving adoption:

• Business-to-Business (B2B) transactions—Real-time payments are particularly valuable for invoice settlements, supplier payments, and contract-based transactions. Companies benefit from faster cash flow, reduced payment disputes, and improved reconciliation processes.
• Business-to-Consumer (B2C) payouts—Corporate disbursements, such as insurance claims, loan disbursements, and refunds, are rapidly shifting toward instant payments. Consumers prefer immediate fund availability, and businesses can eliminate costly check processing and ACH delays.
• Peer-to-Peer (P2P) payments—While services like Venmo, Zelle, and Cash App dominate the consumer space, bank-led P2P solutions using FedNow and RTP offer greater security and direct account-to-account transfers.

As digital transactions evolve, instant payments are becoming the preferred method for businesses and consumers alike, from corporate payouts to peer-to-peer transfers.

The role of ISO 20022 in real-time payments

Both RTP and FedNow use the ISO 20022 messaging standard, improving global interoperability and data transparency. Alisa Sevilla (Javelin Strategy & Research) emphasized that structured data fields improve fraud detection, regulatory compliance, and automated processing.

By adopting ISO 20022, banks enhance transaction transparency, improve cross-border payment efficiency, and streamline reconciliation processes. While full interoperability between RTP and FedNow is not yet realized, their shared use of ISO 20022 ensures a smoother transition for banks adopting both networks.

To future-proof payment infrastructure, banks must prioritize ISO 20022 integration and leverage its rich data capabilities for compliance and fraud mitigation.

Fraud & risk management in real-time payments

With the rise of instant payments, fraud risks are increasing, making proactive risk management essential. The panel discussed key strategies for fraud prevention, including real-time sanction screening, AI-driven fraud detection, and network-wide fraud frameworks.

Matt Brown (BNY) highlighted that network-level fraud solutions are being developed by The Clearing House and FedNow to enhance security without delaying transactions. Financial institutions must also strengthen KYC (Know Your Customer) protocols to reduce fraudulent activity.

As real-time fraud risks evolve, banks must implement a multi-layered approach that includes AI-based monitoring, stronger authentication protocols, and standardized fraud detection frameworks.

Final thoughts & industry outlook for 2025

This year will be pivotal for real-time payments, with adoption expected to triple among smaller banks and credit unions. FedNow and RTP will expand, with Request for Payment (RFP) solutions driving new revenue opportunities.

Key developments include higher transaction limits—RTP increasing its cap to $10 million, enabling high-value B2B transactions like corporate disbursements and real estate settlements. ISO 20022 adoption will also accelerate, enhancing global payment interoperability.

As real-time payments grow, banks will prioritize fraud prevention and security to mitigate emerging risks. Institutions that modernize early will gain a competitive edge, while those that delay risk falling behind in an increasingly instant and interconnected financial landscape.

For more on FedNow and real-time payments, watch our on-demand webinar.