5 reasons US banks aren’t sending Instant Payments (yet)

 TL;DR

• Fintech pressure is rising. Apps like Zelle and Cash App are setting new standards. Banks are struggling to compete—and many are losing ground.

• Running 24/7 is tough. Real-time payments need nonstop systems, support, and liquidity. Many banks aren’t built for that.

• Old tech is holding them back. Legacy infrastructure, fraud fears, and lack of clear strategy keep banks from enabling Send on RTP or FedNow.

Instant payments are gaining ground in the US. Volumes are rising. Transaction limits are increasing. Customer demand—especially from corporates—is surging. And with both RTP and FedNow now live and evolving, the technical foundations are in place. 

But adoption still lags the rest of the world 

Why? 

Well, while 70–80% of banks are expected to receive instant payments by 2028, only 30–40% are expected to send them. That gap is holding back ubiquity. 

So what’s stopping banks from making the leap? 

We asked 300 senior payments professionals at US banks to find out. Their responses reveal that while attitudes have shifted and optimism is growing, serious barriers remain—from outdated systems and operational demands to fraud risk and competitive pressure. 

Here are the top five reasons US banks aren’t sending instant payments (yet).

1. Fintech competition (36%)

The biggest barrier today is competition from fintechs. 

Keeping up with seamless, low-cost instant payment options like Zelle, Cash App, and Venmo is hard. These platforms are changing consumer expectations and the economics of payments. 

Zelle alone reported 151 million enrolled users and over $1 trillion in transactions in 2024, the largest ever for a person-to-person payment service. Built into more than 2,200 US banking apps, Zelle is free for consumers, easy to use, and secure. 

Banks are feeling the heat. Nearly every respondent (93%) said fintech competition is shaping their instant payments strategy. Among the largest banks, nearly two-thirds (65%) report significant pressure.   

That’s a big change from 2024, when the top concern was updating internal systems. 

Banks are worried that fintechs will cut them out of the picture. That fear is one of the main reasons they’re now pushing to adopt instant payments. But for some banks, the “good enough” response—for now—is just to offer Zelle. 

That’s not a sustainable strategy. Zelle has succeeded in the person-to-person space, but it doesn’t yet address high-value business-to-business or payroll scenarios. These areas have far more revenue potential and complexity. Zelle is not enough if you want to keep your corporate customers.

2. 24/7 availability (34%)

Coming in second: the demands of running a real-time service around the clock. 

Instant payments don’t stop at 5pm. Banks must build resilient systems with robust failover, continuous monitoring, and liquidity strategies that work 24/7.  

 Maintenance windows, customer support, software updates—everything needs to operate without downtime.  

And cross-border payments are even harder. Many FX markets don’t operate 24/7, making real-time settlement both technically and financially challenging.

3. Updating architecture and internal systems (28%)

Third is the challenge of modernizing legacy infrastructure. 

Real-time payments mean real-time everything—reconciliation, fraud detection, data accuracy, and scalability. Banks need infrastructure that can handle thousands of transactions per second, interoperate with other systems, and stay secure. 

For many, that requires a deep transformation of core systems that weren’t built for speed or flexibility. 

 4. Fraud (26%)

Fraud is rising up the agenda. Last year, it ranked ninth. This year, it’s fourth. 

Our research also reveals over 85% of banks expect fraud to increase as instant payments become more common. The risks are real: instant payments are fast and final. Once the money moves, it’s gone.  

We expect concerns to rise even higher as pressure builds. 

In December 2024, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against JPMorgan Chase, Bank of America, and Wells Fargo, accusing them of letting fraud thrive on Zelle. The case was dropped. But that kind of regulatory scrutiny sends a clear warning. 

Will this slow down RTP Send adoption? It could. If banks feel exposed to similar risks with real-time payments—and don’t yet have the right fraud controls in place—they may hold back on enabling Send functionality. 

Nearly all banks (96%) support an ID verification tool like Confirmation of Payee to combat scams and misdirected payments. But making these protections work in a fragmented banking landscape would not be easy. 

 5. Lack of information (24%)

Finally, nearly a quarter of banks say they simply don’t know where to start. 

The technology, infrastructure, regulation, onboarding, and testing requirements are complex. And without clear guidance, many banks find themselves stalled before they begin. 

That’s where a phased strategy—starting with a focused use case, risk model, and infrastructure roadmap—can help. 

What about RTP vs FedNow?

The debate over choosing between RTP and FedNow is fading. Fewer than a fifth (17%) of banks still see it as a major barrier. A recent study found just under six in ten (58%) banks are now using both schemes. Most now recognize that enabling both RTP and FedNow is the best way to stay competitive and reach more customers.  

The road ahead

Momentum is real. Banks are more optimistic than ever about the business case for instant payments. But turning that momentum into meaningful adoption means tackling the operational, architectural, and behavioral challenges head-on.  

Many have core systems that are too old. They’re worried about fraud and security. Running a 24/7 system is expensive and complicated. A lot of banks aren’t even sure what problem instant payments are supposed to solve for them. They also have to figure out how to manage money in real time—either by pre-funding accounts or finding better ways to track liquidity. 

Sending money instantly is a very different challenge from receiving it. It’s a whole different set of risks, rules, and operations. 

Banks that act now will shape the future—attracting new customers, defending their margins, and staying ahead of fast-moving competitors. Those who wait may find themselves left behind. 

Want to learn more?

Explore the full findings by downloading our 2025 US instant payments report: “Pushing the limits.” 

Or speak with a RedCompass Labs expert today.