Instant payments are becoming significantly more attractive for US banks finds RedCompass Labs, the payments experts, as it finds that 84 per cent of US banks say the new $10million Real-Time Payment (RTP) network limit and $500,000 FedNow cap are a good thing.
The results, published in a new report, Pushing the Limits: US Instant Payments in 2025, based on responses from 300 senior payments professionals at US banks, suggest larger transaction limits are helping to boost instant payment demand. Nearly half (47 per cent) of US banks now experience overwhelming corporate demand, more than triple the 16 per cent from 2024.
Banks are now bracing for a 23 per cent increase in instant payments volumes over the next three years. Over one in 10 (12 per cent) expect that surge to top 50 per cent. Almost nine in 10 (88 per cent) believe that instant payments will directly benefit their bottom lines, with 45 per cent anticipating a major boost.
The report also reveals significant concerns around fraud. With adoption on the rise, 85 per cent of banks expect fraud to rise, and 36 per cent predict a sharp uptick. In response, 96 per cent of US banks back the implementation of a ‘confirmation of payee’ scheme to protect against fraud. Other fraud-fighting measures like AI (40 per cent), real-time fraud detection (39 per cent), and multi-factor authentication (35 per cent) are also gaining traction.
Banks are enabling instant sending capabilities
David Patrick, head of payments strategy at RedCompass Labs, comments: “Not long ago, US banks were debating how RTP and FedNow would coexist, facing challenges like legacy systems, cannibalising existing revenue streams, and fraud. Today, demand for instant payments is surging, transaction volumes are rising, and more banks are enabling send capabilities, removing barriers.
“Our latest research shows strong demand for instant payments and growing pressure on banks to deliver. As RTP and FedNow become more attractive, many banks are now viewing instant payments as a way to strengthen their bottom lines.
“But with countries like Brazil and India having revolutionised how people transact, the US still has a long way to go. Instant payments adoption isn’t just a tech challenge, it requires a shift in behaviour. With foundations in place and AI accelerating modernisation, the US is on the cusp of broader enablement and a payments revolution that’s already reshaping the global financial system.”
Other key findings
- US banks lead instant payments race – 81 per cent of US banks believe they are leading the way on instant payments compared with the rest of the world, with 42 per cent saying it’s a significant lead. Only four per cent feel they are behind but have the potential to catch up.
- AI is central to payments strategies – Over six in 10 (62 per cent) banks view AI as a key part of their payments strategies. More than two-fifths (43 per cent) plan to use AI for payments modernisation, while 40 per cent are focused on specific use cases such as fraud prevention, customer service, and automation.
- Fintech competition is impacting banks – Most banks (93 per cent) say competitive pressures from fintechs and neobanks are influencing their decisions to adopt instant payments, with 60 per cent saying they are greatly influenced.
- Barriers to instant payments adoption – The top three barriers are fintech competition (36 per cent), 24/7 availability (34 per cent), and updating architecture and internal systems (28 per cent). Concerns about cannibalising other revenue streams dropped from third place in 2024 to sixth, while fraud concerns jumped from ninth to fourth.
- Interoperability interest is high, but action is low – While 92 per cent of banks are considering interoperability and 52 per cent are strongly considering it, very few (two per cent) have started their journey.
- Value-added services likely to be adopted – The top five services are bill payments (52 per cent), digital ID solutions (42 per cent), confirmation of payee (38 per cent), QR code-based payments (34 per cent), and request to pay (34 per cent). Surprisingly, earned wage access came in ninth place (29 per cent).
