Since The Clearing House raised its real-time payments transaction limit from $1 million to $10 million in February, outcomes have been favorable. According to Bank of America, transactions exceeding $1 million now represent more than half the total value of U.S. real-time payments processed for corporate clients.
The RTP network’s previous transaction threshold was set at $1 million since April 2022, when it was lifted from $100,000. Competitor FedNow intends to increase its limit from $500,000 to $1 million later this summer.
Bank of America is among the first financial institutions enabling corporate clients to utilize the network’s maximum transaction capacity. This growth has been fueled by
new use cases
, especially in business-to-business payments.
Opportunities for Growth in B2B Transactions
Till July 2024, businesses comprised approximately 80% of RTP transactions. However, only 95% of these payments were made to consumers, indicating significant potential for higher-value transactions directed between companies.
“Businesses can now make instantaneous payments to suppliers, contractors, and vendors upon receipt of goods or services,” explained
Elisa Tavilla
, Director of Debit Payments at Javelin Strategy & Research. “This enhances inventory management, cash flow, supply chain operations, and overall payment efficiency. Use cases such as payroll processing and real estate transactions can also benefit from the increased RTP transaction limit.”
Advantageous for the Industry as a Whole
The Bank of America’s move is expected to strengthen the adoption of U.S. real-time payments.
“These developments are significantly beneficial for the industry as a whole,” noted
Hugh Thomas
, Lead Analyst of Commercial and Enterprise Payments at Javelin Strategy & Research. “There has been a tendency to keep new use cases for emerging solutions like real-time payments confidential, fearing competitive advantage might be lost by sharing them. However, by educating the broader ecosystem, these revelations help in uncovering similar applications and boosting overall demand for these products.”
The information also underscores RTP as a reliable payment option for businesses that have traditionally relied on wire transfers.
“The immediate and substantial increase in this measure when the limit was raised to $1 million indicates significant market appetite,” Thomas continued. “This suggests that RTP can be seen as a secure alternative to wires, particularly for large-scale transactions.”