RTP and FedNow Instant Payments: Where’s the Hockey Stick?

Real-time payments networks have been hobbled by the wrong approach. Thinking of them as utilities will make a big difference.

The launch and rapid national deployment of true real-time payments has been an unprecedented undertaking in U.S. payments history and a major accomplishment. While payment volumes at the two fully instant U.S. payment networks—The Clearing House’s RTP and the Federal Reserve’s FedNow—have certainly grown since launch, there has not been the kind of “hockey-stick” growth that many (including the authors of this article) expected. Despite clear advantages, these truly instant payment networks lag far behind the alternatives.

Consider recent payment volumes for RTP and FedNow. At year-end 2025, RTP was handling north of 40 million payments a month, or more than a million payments a day on most days.  FedNow was getting close to processing a million payments a month. While collectively this is respectable volume, it is still a fraction of the more than 3 billion monthly U.S. ACH transactions, or roughly 25 billion monthly U.S. payments via all networks.

And though volumes for both networks continue to grow, there is no sign of exponential growth, whether you call it a hockey stick, an “S-curve,” or other share-shifting displacement.

It is highly instructive to look at the overall U.S. faster- payments market. We believe (as explained below) the relevant market definition here includes all U.S. payments that involve instant or near-instant funds availability to the receiving account holder (more on that definition shortly). The bottom line is: RTP and FedNow combined have something like 3% market share—neither a barnstorming nor rapidly changing performance.

Alternative faster payment methods—for example, Zelle, Push-to-Card, digital wallets, even same-day ACH credits—process much higher volumes than RTP/FedNow, despite relying on legacy card and ACH networks with delayed settlement (though Zelle, Venmo, and other wallets use RTP to some extent). When you consider the inherent advantages of instant payments—instant messaging, immediate funds availability and confirmation, a rich ISO20022 message set—the obvious question is, why?

Late to the Game

Fundamentally, there are three major reasons RTP/FedNow has not achieved the exponential growth many expected.

1. U.S. instant-payment networks were late to the game;
2. Ubiquity is difficult in the U.S.; and
3. End users fundamentally don’t care about instant settlement.

Let’s look at these reasons one at a time.

RTP and FedNow were late to market. By the time RTP launched in 2017 and FedNow debuted in 2023, digital wallets, push-to-card, and same-day ACH were already well-established faster-payment options, relying on the existing, ubiquitous payment systems, and they were leveraged by early adopters.

Zelle joined the competitive mix shortly before RTP launched, leveraging largely next day ACH and but also push-to-card (and later RTP settlement). Although RTP and FedNow are faster than ACH and have clear advantages over push-to-card, the older alternatives were working well enough and seized the first-mover advantage.

Ubiquity means connecting all the way to the user interface.  RTP and FedNow faced a further disadvantage because they had to build reach from scratch. By contrast, faster payments leveraging ACH and/or card networks went live with essentially ubiquitous consumer reach and banks already enabled to initiate payments for their customers.

It has taken years for RTP to reach more than 70% of U.S. checking-account balances. FedNow has more financial institutions connected to receive than RTP does, but is not yet at that percentage reach.

The process of enabling RTP/FedNow requires much more integration with bank systems than a simple telecommunications link.

In particular, sending (rather than just receiving) instant payments requires connecting a variety of products, digital channels, and services—including bill pay, A2A transfers, P2P payments, APIs, online and mobile banking, treasury portal channels, various disbursement services, payroll services, integrated payables and industry-specific solutions. Each of these integrations is a major project for any  FI or its third-party processors.

By contrast, the P2P apps and digital wallets—Venmo, Cash App, PayPal, and, later, Zelle—leveraged existing ACH and card networks, allowing them to focus on the consumer-value proposition and user interface, rather than building ubiquity.

Instant funds availability—not settlement—matters to end users. If the payment experience—and, in particular, funds availability—happens in real time, immediate settlement is, in general, irrelevant to the end user. The payer hits the send button and the receiver is notified immediately that they have and can use the money. Who cares if the receiving bank extended credit to its customer or actually got the funds? Only the bank.

The P2P apps and digital wallets, including Push-to-Card, understood this and flourished. By leveraging existing ACH and card networks, they were able to quickly focus on the consumer-value proposition and user interface, without having to deploy completely new payment networks. By the time RTP launched in late 2017, one of the primary use cases for instant payments, P2P transfers, was already well served, as were many other use cases.

Zelle has effectively won the P2P portion of the instant-payments market, and will continue to take market share in that application. On the commercial side, the card networks are priced higher than RTP, but, with first-mover advantage and low marginal cost, they will be difficult to dislodge.

Bill pay is a very large use case that has not seen much adoption of faster payments. Many billers, however, give customers instant credit for payments made by ACH Web debits or debit card, so there the payer experience is immediate satisfaction.

A Utility Orientation

While billers may prefer the certainty of being paid by RTP or FedNow, the process based on the Request for Payment message will take a long time to deploy widely, requiring extensive investment by both merchants and consumer banks, with unclear consumer need. Putting the Request for Payment into the Zelle front end may facilitate adoption, but it’s not clear that consumers will find this a dramatically better way to pay than current methods.

Does this mean RTP and FedNow are destined to be minor players among payments networks? We don’t think so. Fully instant payments have some clear advantages over alternatives.

To thrive, however, the industry needs to think differently: RTP and FedNow are not themselves products to be sold to end users. They are underlying infrastructure connected to checking accounts, to be used by banks and fintechs to build their products and to improve bank and large-entity payables and receivables processing.

End users don’t care how the plumbing works. Payment-service providers do.

Current usage of RTP provides examples of how a utility orientation can succeed. A handful of banks use instant RTP instead of ACH to settle Zelle payments, and fintechs are using RTP for wallet downloads, earned-wage access, and merchant settlement. These are uses where RTP offers a clear end-user advantage over same-day ACH or Push-to-Card.

In all these cases, instant payments don’t define the product, they just make it better. And when RTP and FedNow were launched, TCH and the Fed never thought of these use cases among those touted for the new networks. It was the providers of wallets, payroll services, and merchant processors that figured out that instant payments were good for business.

End users may not care about instant settlement. The providers of financial services to end users, however, do. They also care about the other advantages of instant payments, such as confirmed delivery, 24/7 availability, low rates of failed payments, and others.

Price for Volume

We believe instant payments should become more a use-case-agnostic utility. In essence, the instant networks need to remember they are payment rails and not payment solutions. Let the FIs and fintechs focus on end users.

A utility orientation can simplify the work of instant-payment networks and broaden implementation. Both RTP and FedNow have rules, technical specifications, and other requirements that are driven by use cases and assumptions about end-user experience. We believe many of these are artifacts of an unnecessary use-case orientation.

Consumer protection is best done by the regulators of banks and payment-service providers and their products. Payment networks are in a weaker position to define user experiences that meet the evolving needs of consumers and businesses. Where consistency is needed, overlay services such as P2P transfer brands or B2B networks can operate directories and set standards.

This approach also helps overcome the gap in ubiquity across bank channels noted earlier. Each bank can focus on enhancing those products that benefit most from instant payments, without waiting for every bank to implement a full suite. Even a small number of sending banks can serve fintechs that harness instant payments to enhance their products.

Finally, networks need to price their services like a utility. If you don’t price for volume, you will never get volume. Instant payments can and should be expanded to be a general ACH replacement, priced at a fraction of the current 4.5 cents paid by the sending bank, including a charge to the receiving bank, which gets immediate interest-earning funds.

Very low, two-sided pricing will allow banks and large payers to reap operational efficiency benefits from instantly settled and confirmed payments.

In short, we believe that thinking of instant payments as a utility, rather than as an end-user service, is the way for instant payments to thrive in the U.S.

—Steve Ledford (was a senior vice president and led the RTP product team at The Clearing House until his retirement in 2022.)

—Lee Kyriacou (was a senior member of the RTP product team at The Clearing House until his retirement in 2024.)