Whipcracking is part of traditional culture in many Alpine regions of Western Europe, but it has also become a performing art, and, in Australia, a sports competition. Did you know that to crack a whip, the tip needs to travel faster than the speed of sound — approximately 343 m/s — creating a small sonic boom? Instant payments travel even faster than that and settle into the recipient’s account mere seconds after being sent, regardless of distance.Instant payments are one of the fastest-growing innovations in the payment ecosystem, fueled by the introduction of two platforms — the Clearing House’s real-time payments network, RTP®, and the Federal Reserve’s FedNow® Service.As many as 285K businesses rely on the RTP network each month for business-to-business (B2B) transactions. On February 9, the RTP network transaction limit increased from $1MM to $10MM, which has driven usage of the platform even higher. After a slow start in 2017, adoption of the RTP network has grown exponentially through 2024 and 2025 and now processes an average of 1.3MM payments daily, setting a record on October 3, 2025 of over 1.8MM transactions, valued at $5.2B.The FedNow Service, introduced in 2023 as a public-sector complement to RTP, counts over 1.6K participating financial institutions, 95% of which are community financial institutions (CFIs). The FedNow Service has raised its transaction limit twice this year — once over the summer to $1MM and again in November to $10MM — demonstrating continued momentum for instant payments across the board. According to a Fed survey, three in four businesses using instant payments are now looking to their FI to provide this service.It’s Good for BusinessBusinesses benefit from using instant payments in several ways:
- Better cash flow management. Payments are irrevocably sent and received immediately 24/7/365, improving liquidity. For example, after receiving an instant payment from a distributor, a manufacturer is able to restock inventory sooner.
- Increased efficiency. Automated remittance data reduces the need for manual processing and reconciliation. Moreover, instant payments typically have lower end-to-end costs than other payment methods.
- Improved transparency. Payments come with immediate confirmation to both payer and payee, including any relevant payment-related information. By providing a timestamped record consistent between the end users and bank-to-bank settlement for every payment, instant payments facilitate improved transparency for audit and compliance purposes.
- Enhanced customer and employee satisfaction. Real-time processing of payments ensures there are no delays in fulfilling orders, while immediate refunds reduce customer frustration and allow businesses to build trust and loyalty. Likewise, employees value same-day pay, which can improve retention.
Challenges for CFIsWhile instant payments clearly benefit their business customers, some institutions may have concerns about adopting them. Here are some typical concerns:
- Technology barriers. Many CFIs’ legacy systems are incompatible with instant payment systems. They can either adapt their systems to connect directly to the real-time network or, more likely, connect with a core banking provider, a payment processor, or a correspondent bank — a faster and less costly solution.
- Fraud prevention and compliance. The instant settlement of large numbers of payments makes fraud detection and prevention more challenging, highlighting the importance of strong security measures. Compliance with regulatory requirements, such as KYC and AML, also needs to occur in real time. CFIs should consider using AI-based solutions to automate all these functions.
- Liquidity risk. To offer instant payments, CFIs will need to have adequate liquidity or available credit to fund real-time settlement. Correspondent banks, such as PCBB, offer a full liquidity management solution, eliminating the need for CFIs to continually monitor their balances.
How to Get Started
- Develop a strategy. As a first step, CFIs should determine the demand for real-time B2B payments among their customers — this will help them decide whether to support the RTP network, FedNow, or both.
- Assess infrastructure. Having evaluated the suitability of their tech stack and any upgrades that may be required, CFIs should choose a connectivity strategy best suited to their institution, be that direct participation, using a core processor, or partnering with a correspondent bank.
- Ensure compliance. CFIs will need to review their compliance practices and determine whether they are effective in preventing fraud and complying with AML requirements. They may need to fine-tune their models to reflect the speed and finality of instant payments.
- Educate customers. In order to drive adoption, CFIs will need to educate their business customers on the benefits of instant payments. This could be achieved by offering educational workshops, webinars, or marketing literature, highlighting the use cases that apply to each individual customer.
Given the obvious benefits of instant payments to business customers, demand is bound to continue to grow. Early adopters will position themselves as innovators, strengthen their business relationships, and establish a competitive advantage. To develop a sound instant payment strategy, CFIs should assess their market, review their infrastructure, strengthen compliance practices, and plan an educational campaign to drive customer adoption. Working with a correspondent bank such as PCBB is one way of adding this offering to their payment solutions without major infrastructure changes.
