Transaction Volume Growth in Real-Time Payments Network

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

In order to remain competitive with RTP, The Federal Reserve’s instant payment service, FedNow, has also raised its limits. Starting from July, FedNow will introduce a new limit of $1 million for higher-value credit transfers, covering transactions such as business-to-business payments, real estate deals, and payroll funding. The default transaction limit will stay at $100,000.

Banks Favor Higher Limits

Enhanced transaction limits are critical in the rapid adoption of instant payment services. According to Red Compass Labs’ research, more than 80% of senior payments professionals from U.S. banks believe that increasing the RTP transaction limit to $10 million has improved its attractiveness. Smaller banks with 500 to 2,000 employees are even more supportive, as 88% of them say that new limits have significantly aided their operations. Additionally, 84% think that raising FedNow’s cap will further enhance its appeal.

The Clearing House has identified several use cases for the increased limit, including commercial and high-value residential real estate payments, merchant settlements, supply chain payments, and cash consolidation. RTP’s first $10 million transaction was made on behalf of Computershare, a global transfer agent.

Rising Demand for Instant Payments

The demand for instant payment services is surging among both corporate and retail customers. Red Compass’ research indicates that nearly half of the surveyed banks are currently experiencing high demand from corporate clients, a figure three times greater than in last year’s survey. Mid-sized banks with 2,000 to 10,000 employees are bearing the most pressure.

Interestingly, retail customers are also driving significant demand for instant payments. The percentage of respondents reporting overwhelming demand from retail customers has nearly doubled from 11% last year to 43%. The largest banks with more than 50,000 employees are the most impacted by this trend.

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