Business clients are demanding instant payment services from their financial services providers as they look to streamline payment processes. 

As instant payments volume grows on The Clearing House’s Real Time Payments (RTP) network and the Federal Reserve’s FedNow rail, businesses expect their banks to provide both send and receive capabilities on the payments rails, according to banking solution provider Q2’s January 2025 Market Analysis: The State of Commercial Banking, released today. The report reflects data collected from 140 banks and credit unions. 

“Beyond speed, the true value of the instant payments ecosystem for [business-to-business] payments is the ability for payment information, such as invoices, to travel with the payment on the payment rail rather than needing to be sent separately via email or postal mail,” Debbie Smart, senior product marketer at Q2, told Bank Automation News. 

However, as volume and adoption grow, FIs fall short of client expectations for instant payments. The report states: 

• 22% of large and midsize commercial banks offer both send and receive capabilities on The Clearing House’s RTP network; and 

• 4% of large and midsize commercial banks offer both send and receive capabilities on the Federal Reserve’s FedNow rail.  

To remain competitive and retain business clients, FIs must invest in instant payment capabilities, including both send and receive functionality, according to the report.  

“If financial institutions provide only the ability to receive instant payments, their business customers can’t fully take advantage of this crucial capability”, Smart said. “It’s also important for financial institutions to have capabilities on both networks so their customers aren’t limited to using instant payments with only the businesses on the same network.” 

Instant payment volume, adoption

In the fourth quarter of 2024, RTP transaction volume reached $80 billion, up 16% year over year, according to The Clearing House. 

Similarly, FedNow payment volume in Q4 2024 reached $20 billion, up from $17 billion in Q3 2024, according to the Federal Reserve. 

Adoption, too, is growing. As of this month the RTP network was connected to 850 financial institutions and FedNow had on-boarded more than 1,200 institutions.  

“To fully operate with RTP and FedNow, financial institutions must integrate technically, ensure 24/7 operational readiness, comply with regulations, update business processes, and collaborate with industry partners,” Smart said.  

Some of the financial institutions live on both RTP and FedNow include: 

• $2.5 trillion Bank of America; 

• $4 trillion JPMorgan Chase; and 

• $678 billion U.S. Bank.  

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