The Real-Time Payments (RTP) network operated by The Clearing House has seen a doubling in transaction volume over the last eighteen months, hitting one billion transactions earlier this year. A significant factor contributing to this growth is an increase in its transaction limit; since February, RTP now accommodates payments of up to $10 million per transaction.

In light of this development, The Federal Reserve’s instant payment service, FedNow, is enhancing its limits to remain competitive with RTP. Effective from July, FedNow will adopt a new threshold of $1 million for high-value credit transfers, including business-to-business payments, real estate transactions, and payroll funding. By contrast, the default transaction limit remains unchanged at $100,000.

Banks Favor Higher Limits

The introduction of higher limits on instant payments is significantly boosting their acceptance among financial institutions. According to a study by Red Compass Labs, over eighty percent of senior payments professionals at U.S. banks believe that raising the RTP transaction limit to $10 million increases its attractiveness. This figure reaches 88% for smaller banks with between 500 and 2,000 employees. Additionally, 84% of these institutions anticipate FedNow’s new cap will further enhance their appeal.

The Clearing House has identified various use cases that stand to benefit from the increased limit on RTP payments, such as commercial and high-value residential real estate transactions, merchant settlements, supply chain payments, and cash consolidation. The network’s first $10 million transaction was completed for Computershare, a global transfer agent.

Consumer Demand Rising

The demand for instant payments is on the rise across various sectors. Red Compass’s research indicates that nearly half of the surveyed banks are now experiencing significant pressure from corporate clients—three times the rate reported in last year’s survey. Mid-sized banks, particularly those with 2,000 to 10,000 employees, are under particular strain.

Interestingly, consumer demand is also on the uptick. Only 11% of respondents noted overwhelming customer demand for instant payments in last year’s survey, but this has surged to 43% in the current year. For retail customers, it’s the largest banks—those with over 50,000 employees—that are experiencing the greatest pressure.

Many financial institutions are also growing concerned about competition from fintechs, neobanks, and services like Zelle. Approximately two-thirds of the largest banks state that their decisions on instant payments are heavily influenced by competitive pressures.