The Clearing House’s Real-Time Payments (RTP) network has seen its transaction volume double over the last 18 months, hitting one billion transactions this year. This growth can largely be attributed to an increase in transaction limits; since February, RTP now allows payments of up to $10 million each.

In keeping with this competitive landscape, The Federal Reserve’s instant payment service, FedNow, is also raising its own limit. Starting from July, it will introduce a new cap of $1 million for higher-value credit transfers, specifically covering transactions like business-to-business payments, real estate deals, and payroll funding. The standard transaction limit will remain at $100,000.

Banks Favor Higher Limits

The increased transaction limits are crucial in driving the adoption of instant payment services. Research from Red Compass Labs indicates that over 80% of senior payments professionals at U.S. banks view the RTP $10 million limit as a significant improvement. Even smaller banks, those with between 500 to 2,000 employees, are highly enthusiastic about this change, with 88% seeing it as beneficial. Additionally, 84% of these banks believe that raising FedNow’s transaction cap will further enhance its appeal.

The Clearing House has identified several use cases where the increased limit could be particularly useful, including commercial and high-value residential real estate payments, merchant settlements, supply chain payments, and cash consolidation. RTP’s first $10 million payment was made on behalf of Computershare, a global transfer agent, to another of its company accounts.

Consumer Demand Grows

The demand for instant payments is rapidly increasing. According to Red Compass research, nearly half of the surveyed banks are currently dealing with overwhelming demands from corporate clients—three times more than were reported in last year’s survey. Mid-sized banks, especially those with 2,000 to 10,000 employees, are particularly under pressure.

Surprisingly, retail consumers are also driving the demand for instant payments. Just 11% of respondents from last year’s survey mentioned feeling this pressure, but that number has now risen to 43%. For this segment, it is the largest banks—those with over 50,000 employees—that are facing significant pressure.

Many banks are also increasingly concerned about competition from fintechs, neobanks, and services like Zelle. Two-thirds of the largest banks report that these competitive pressures heavily influence their decisions regarding instant payment services.