RTP® and FedNow transaction limit increases fuel instant payments surge

• 84% of banks say RTP and FedNow limit increases boost appeal of instant payments
• “Overwhelming demand” for corporate instant payments has tripled since 2024
• 96% support UK-style confirmation of payee scheme to fight scams

London, 24 April 2025: New research from RedCompass Labs shows that RTP and FedNow’s rising transaction limits is making instant payments significantly more attractive for U.S. banks.

84% of US banks say the new $10 million RTP® limit boosts its attractiveness, and 84% believe raising FedNow’s $500,000 cap will have the same effect.

The results suggest larger transaction limits are helping to boost instant payment demand. Nearly half (47%) of US banks now experience overwhelming corporate demand, more than triple the 16% from 2024.

Banks are now bracing for a 23% increase in instant payments volumes over the next three years. Over one in ten (12%) expect that surge to top 50%. Almost nine in ten (88%) believe that instant payments will directly benefit their bottom lines, with 45% anticipating a major boost.

The research, “Pushing the Limits: 2025 US Instant Payments,” is based on responses from 300 senior payments professionals at US banks.

The report also reveals significant concerns around fraud. With adoption on the rise, 85% of banks expect fraud to rise, and 36% predict a sharp uptick. In response, 96% of US banks back the implementation of a ‘confirmation of payee’ scheme to protect against fraud. Other fraud-fighting measures like AI (40%), real-time fraud detection (39%), and multi-factor authentication (35%) are also gaining traction.

Other key findings include:

• US banks lead instant payments race – 81% of US banks believe they are leading the way on instant payments compared with the rest of the world, with 42% saying it’s a significant lead. Only 4% feel they are behind but have the potential to catch up.
• AI is central to payments strategies – Over six in ten (62%) banks view AI as a key part of their payments strategies. More than two-fifths (43%) plan to use AI for payments modernization, while 40% are focused on specific use cases such as fraud prevention, customer service, and automation.
• Fintech competition is impacting banks – Most banks (93%) say competitive pressures from fintechs and neobanks are influencing their decisions to adopt instant payments, with 60% saying they are greatly influenced.
• Barriers to instant payments adoption – The top three barriers are fintech competition (36%), 24/7 availability (34%), and updating architecture and internal systems (28%). Concerns about cannibalizing other revenue streams dropped from third place in 2024 to sixth, while fraud concerns jumped from ninth to fourth.
• Interoperability interest is high, but action is low – While 92% of banks are considering interoperability and 52% are strongly considering it, very few (2%) have started their journey.
• Value-added services likely to be adopted – The top five services are bill payments (52%), digital ID solutions (42%), confirmation of payee (38%), QR code-based payments (34%), and request to pay (34%). Surprisingly, earned wage access came in ninth place (29%).

David Patrick, Head of Payments Strategy at RedCompass Labs, comments: “Not long ago, US banks were debating how RTP and FedNow would coexist, facing challenges like legacy systems, cannibalizing existing revenue streams, and fraud. Today, demand for instant payments is surging, transaction volumes are rising, and more banks are enabling send capabilities, removing barriers.

“Our latest research shows strong demand for instant payments and growing pressure on banks to deliver. As RTP and FedNow become more attractive, many banks are now viewing instant payments as a way to strengthen their bottom lines.

“But with countries like Brazil and India having revolutionized how people transact, the US still has a long way to go. Instant payments adoption isn’t just a tech challenge, it requires a shift in behavior. With foundations in place and AI accelerating modernization, the US is on the cusp of broader enablement and a payments revolution that’s already reshaping the global financial system.”

ENDS

About RedCompass Labs
RedCompass Labs enables good payments and helps stop the bad. We are experts in ISO 20022-based payments, instant payments, cross-border payments, payments interoperability, and financial crime. We use the latest Applied AI, micro-services technology, and deep payment knowledge to deliver payment transformation projects. These solutions help our clients accelerate their payments modernization programs, reducing costs and regulatory risk.

The RedFlag Accelerator sets the industry standard for detecting financial crimes. Using a persona-oriented approach, it identifies the actors behind transactions—victims, money-laundering professionals, perpetrators, and more. By combining the latest red flags, crime models, and OSINT data, our system detects crimes spanning labor and sex trafficking, elder abuse, drug trafficking, as well as scams and potential APP fraud within financial transactions. Our comprehensive offerings include algorithms, analytics, and training tools for banks’ systems and teams.

With offices in London, Warsaw, Brussels, Singapore, Tokyo, Miami, Toronto, and Pune, we support clients worldwide.

To learn more about RedCompass Labs and its services, visit our website at www.redcompasslabs.com.

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