By David Watson
President and CEO of The Clearing House

We live in a world of instant gratification, where the demand for speed and efficiency is a defining feature of modern consumption. This has come to extend to almost every aspect of daily life, from communicating with friends and family and finding an answer to a query online, to streaming a movie and ordering groceries. 

Meeting these real-time expectations requires more than just a seamless, customer-friendly front end – the underlying financial infrastructure must also be fit for purpose. Payments play a central role in this equation, with the ability to send and receive funds instantly serving as a key enabler of this increasingly real-time world. What was once the future has now arrived.

In the U.S., instant payments are available to all banks and credit unions through The Clearing House’s RTP^® network – the country’s largest instant payments system. I hear often from financial institutions that their clients can leverage the RTP^® network for over 90% of their payment activity which demonstrates how those on the network are already recognizing the benefits unlocked by these faster payment rails. Enabling end consumers to receive their salary instantly or pay back a friend in real time is a key part of the value proposition brought by the network. Additionally, by using instant payments, treasury, payables, and receivables teams can better manage their cash flows.

The challenge has been that despite undoubted pockets of success, the ubiquity needed to inspire a full-scale payment revolution is still a long way off. This, however, may be changing as recent indicators suggest that critical mass is now building, with rising volume and value growth spurred on by compelling use cases.

Good things come to those who wait

Updating or replacing the infrastructure that underpins our daily lives is never simple. Whether building a new railway, improving the energy grid, or upgrading telecommunication networks, these transformations are typically costly, multi-year projects. Changing the payment infrastructure – as we are seeing with emerging instant payment rails in the U.S. – is no different.

History is repeating itself – before instant payments, the last big upheaval in the U.S. payments world started in the 1970s, when ACH was first established as a way to expedite the transfer of funds, which had previously been accomplished mostly by checks or cash. Despite the improved speed afforded by an electronically initiated ACH, uptake was slow for several decades – and not until 2008 did the volume of ACH payments overtake checks. Today, The Clearing House clears and settles a daily average of 86 million ACH payments, which is over half of the country’s commercial activity.

When we launched the RTP^® network in 2017, the first new payment network in the U.S. since ACH was introduced 45 years earlier, we accepted that adoption would not be immediate. Though the old adage states “if you build it, they will come,” for financial institutions or corporate treasury teams looking to send and receive real-time payments, coming onboard likely means significant changes to internal processes and technologies. This takes significant time and effort to achieve.

The U.S. is forging a different path forward than other markets. In global jurisdictions where instant payments are already ubiquitous, adoption has often been accelerated by regulatory mandates and the absence of entrenched legacy systems. Due to the complexity of the U.S. payments landscape – where multiple legacy systems coexist at varying stages of technological maturity – the U.S. approach is instead being shaped by market-driven adoption, with innovation, connectivity, and new use cases emerging organically.

But, like the tortoise chasing the hare, slow and steady might just win the race. Market action – in terms of education and adoption – is increasing and we are seeing an acceleration in volume and value growth. From 2023 to 2024, payment value on the RTP^® network rose 94% reaching $246 billion, volume surged 38% to 343 million transactions, and the number of participating FIs grew 67%.

The RTP^® network also accounts for the majority of overall volume and value of instant payments in the U.S., processing about 99.6% of all instant transactions at a value of $3 billion per day. While work remains, it’s clear that the instant payments evolution has begun – and underscoring this impressive trajectory is a growing set of real-world use cases for instant payments.

A place for every payment

While instant payments are certainly on the ascent, there will still be a place for other payment types. What individuals and businesses require is a choice in how they send and receive payments. Offering real-time payments among ACH, wire, check, and card network offerings gives them an additional layer of flexibility. They may not choose the RTP^® network every time, but it’s great for cases where funds are needed immediately.

So, what can happen when the RTP^® network is chosen? Instant payments can benefit businesses and consumers by eliminating delays in funds availability. Rather than waiting one to three days for card transaction funds to settle via ACH, merchants can instead opt for instant settlements on the RTP^® network, with funds deposited into their account immediately. The faster access to cash allows businesses to be more agile in how they cover operational costs, pay vendors, or manage payroll without delay.

For example, a restaurant could deposit an employee’s wages or tips into their account within seconds of their shift ending, helping to reduce the financial strain that can come from waiting for scheduled paydays. Beyond the workplace, the employee can also use instant payments to gain greater financial control — paying energy bills in real time or transferring funds to a brokerage account to seize investment opportunities without delay.

The road ahead

Though the growth in instant payments – backed by a series of strong use cases, including the opportunity the new RTP^® $10 million transaction limit provides – is reassuring, there is still some hesitation. In conversations with financial institutions, a common theme we have heard is that they don’t offer instant payments because their customers are not asking for it.

To my mind, this would be comparable to a computer hardware company in 1992 opting not to build for the Internet because use was not yet ubiquitous. The simple truth is that while end customers might not yet be asking for the RTP^® network en masse, what they are asking for is the ability to do things much faster and with more control – and the financial plumbing needs to support this. This growing need is reflected in the numbers: we recently surpassed one billion payments on the network — doubling from 500 million in less than two years and there are over 300,000 businesses and more than five million consumers sending and receiving instant payments using the RTP^® system. The demand is real and growing.

We are undoubtedly still at the beginning of the journey, but the direction of travel – towards real-time availability – is all but set. Financial institutions and businesses should be at the forefront, evaluating how instant payments and its modern infrastructure fit into their broader strategies and educating their customers on the value they bring. And as with the Internet revolution, it is important not to be left behind.