Faster payments are gaining steam in the U.S., but they're still far from ubiquitous.
Recent data from The Clearing House shows that in 2024, payment value on its RTP network totaled $246 billion, while volume stood at 343 million transactions. More than 650 financial institutions are registered. The Federal Reserve's FedNow Service, meanwhile, has more than 1,200 financial institutions registered. In 2024, value totaled $38.2 billion, while settled payments stood at 1.5 million for the year.
There are several potential use cases that are set to make
"You can't expect a new payment product to come into the market on a Monday and on Tuesday, everyone is using it. That's not the real world," said Rodman Reef, an industry consultant and longtime member of the U.S. Payments Forum involved in the organization's mobile and touchless payments working committee.
Here's what banks need to know about faster payments in 2025:
Growth lies ahead
Debbie Buckland, director analyst at Gartner, said it's encouraging that more banks are adding the
Eventually, banks will adopt both, similar to arrangements they have with Mastercard or Visa, Reef predicts. While banks tend to favor one network, they have certain portfolios of cards on each, Reef said.
For now, however, the faster payment rails are expected to remain small compared with other methods like ACH, even as more banks and customers are expected to adopt faster payments this year. "Both systems are going to remain small compared with the incumbent systems," said Eric Grover, principal at Intrepid Ventures, a corporate development and strategy consultancy.
Expanded use cases
Potential use cases for faster payments include moving money quickly from a Venmo account to a bank, funding and defunding a Venmo or PayPal account, paying out loans to customers in real-time,
Brokerage houses can join the systems as well, making it easier to transfer money instantly from banks as opposed to same-day ACH or several days via ACH, Reef said, adding that he expects to see more of this happening in 2025. Some large retailers may also experiment with bringing faster payments to the point-of-sale, he added.
Higher transaction limits are coming
Some payment professionals expect interest in faster payments to accelerate given
"For businesses, it would make a difference because of the higher value," Tavilla said.
What banks can do to spur customer' demand
Some banks have been on the fence about faster payments because customers largely aren't clamoring for them. "The issue is really demand. Many consumers think they already have real-time payments because they can use Zelle or Venmo, so they don't know why they need this," Buckland said. They don't understand the difference and if they aren't pressing for faster payments, banks can afford to take a wait-and-see approach, she added.
One way for banks to drive adoption is to focus more intently on attracting corporate clients through faster payments, said Gareth Lodge, principal analyst at Celent. If a company's banking contract is up for renewal and bank No. 1 offers faster payments and bank No. 2 offers same-day ACH for the same price, "it starts to get a point of differentiation," he said.
Banks should also think about how faster payments could help certain subsets of customers, Lodge said. Quick-serve restaurants, for example, tend to keep a lot of cash on hand to pay employees, but that's risky. Integrating faster payments into their systems would allow these restaurants to automatically calculate how much employees are owed and pay workers instantly after their shift—eliminating the need to keep gobs of cash on hand. It's a good experience for workers and it's easier for the employer, Lodge said. "It isn't just about instant payments. It's about how it can transform the business process."
