FedNow Vs. RTP: What Businesses Need to Know

‘Time’ equals ‘money’ (cheesy). However, for your small wholesale business in New York, which sells perishable goods to retailers across the Northeast, this is more than just a saying—every minute counts. Delayed payments from retailers can delay shipments and spoil inventory. But with the advent of real-time payments, this worry is a thing of the past. Now, payments occur in seconds, not days, saving you time and ensuring your business runs smoothly. 

The statistics on real-time payments are not just numbers; they are a testament to the potential of this system. The savings generated by RTP are a staggering $116.0 billion for its customers and businesses, and this figure is estimated to reach $245.8 billion by 2028. This is the tangible impact of real-time payments on businesses, and it’s only going to grow from here.

As real-time payments gain momentum, two major payment rails are leading the charge – FedNow and RTP. Both promise the same thing, but they differ in some key areas. So, what do they mean for your businesses? How is FedNow different from RTP? More importantly, which one should your business lean into, or should you be looking at both? Let’s explore.

Let’s cut through the jargon and understand what sets them apart, and which real-time system (or combination) is right for your business. This is not just theoretical knowledge; it’s practical information that empowers you to make informed decisions for your business. 

FedNow and RTP – an Overview

FedNow, launched in July 2023, has already shown remarkable growth in just a year. With a total of 1.5 million transactions in 2024, its transaction value surged from $13 million to over $20 billion in a year. FedNow is operated by the Federal Reserve, a government-backed solution to faster and instant payments. It is growing rapidly, with over 1,000 financial institutions participating in the service. 

Likewise, RTP, established in 2017, continues to expand its reach, processing 98 million transactions valued at $80 billion in the fourth quarter of 2024 alone. RTP is operated by the Clearing House, a privately owned entity, supporting approximately 840 financial institutions and reaching about 70% of the U.S. DDA (demand deposit accounts). 

The FedNow Vs. RTP Dilemma

Let’s explore the key areas to break down the nuances of both systems:

Key areas	FedNow	RTP
Ownership & management	Federal Reserve	The Clearing House
Launched in	2023	2017
Availability	24/7 (all days)	24/7 (all days)
Transaction limit	Up to $ 1 million ( recently increased in February 2025 from $ 500,000)	Up to $ 10 million (recently increased in December 2024 from $ 1 million)
Cost structure	$0.045 per credit transfer	Based on usage and volume
Adoption	Extensive with surging growth	FinTechs and Large Banks
Interoperability	FedNow and RTP are currently not interoperable. That means, payments cannot be sent directly between FedNow and RTP due to different technical specifications.

What’s the Right Payment Strategy for Your Workflow?

So, FedNow or RTP? Here are the strategic considerations to pick what works for your business:

• Advanced Messaging Features

RTP offers rich data exchange and instant messaging with every payment, making transaction reconciliation easy for businesses. This includes advanced messaging features such as remittance advice, request for payment (RfP) and remittance confirmation. 

There are not many add-on features and messaging facilities in the FedNow system. However, FedNow is still evolving and has innovation potential.

This matters for businesses. For example, ERP’s auto-match payment feature can be a valuable tool to reduce accounts receivable overhead. 

• Transaction Limit

B2B payments to suppliers/vendors or large corporate disbursements may be better suited for RTP’s higher cap, for now. The Bank of New York Mellon Corporation was the first to send an RTP payment of $10 million following the increase in the transaction limit in February. 

However, the transaction limit is lower for FedNow. Financial institutions can set lower limits based on their risk appetite. For example, PNC Bank implemented FedNow with a $100,000 default transaction limit for business customers. FedNow’s lower threshold is ideal for bill payments, employee payrolls, and smaller supplier payments.

• Cost Structure

The standardized fee structure, removal of monthly participation fees and other discounts offered by FedNow appeal to smaller institutions by providing predictable costs. The removal of the $25 monthly participation fee and the strategic pricing starting in 2024 have made FedNow more attractive for smaller financial institutions, banks, and credit unions. More institutions have joined due to this competitive pricing, which is a key factor for increased adoption. 

On the other hand, RTP does not offer any waiver on monthly fees and volume discounts. However, it can be competitive in terms of initial infrastructure setup costs. 

• Adoption and Market Trends

RTP has seen strong enterprise adoption, particularly in the BFSI (Banking, Financial Services, and Insurance) sector, as well as in retail, healthcare, manufacturing, IT, and Telecom. Large enterprises dominated the RTP market in 2023, with 60% of the total share. 

FedNow is still in its early stages, but is expected to gain rapid traction. Specifically, the use cases are for government disbursements, smaller commercial payments and municipal payments. In the last quarter of 2024, over 336,000 transactions were settled on the FedNow services. FedNow adoption is expected to surge as federal and state governments explore it for tax refunds, Social Security, and disaster relief.

Some of the solution providers that offer both FedNow and RTP are Fidelity National Information Services (FIS), Fiserv, Finastra, ACI Worldwide, Alacriti, Temenos, and Volante Technologies. 

With growing market presence and increasing transaction volume, real-time payments are becoming a priority for financial institutions in 2025, driven by customer demand for faster and more secure payment solutions. 

Conclusion

Picking between FedNow and RTP isn’t a one-size-fits-all situation. It boils down to the specific needs of your business – speed, scale, partners, and technical capabilities. And honestly? For many companies, the most brilliant move might be to straddle both. Because as the U.S. payment system gets faster and wiser, flexibility isn’t just nice to have — it’s survival.

Here’s the kicker: the global real-time payments market is expected to hit $193.08 billion by 2030, growing at a jaw-dropping 35.5% CAGR. That’s not a trend. That’s a freight train.

Real-time payments aren’t the future. They’re already here, flipping the script on how money moves. Here’s the bottom line: if your business has to stay competitive, you have got to start thinking — and operating — in real-time.