Real-time payments are initiated and settled immediately, offering consumers game-changing benefits. Two payment systems now settle these bank-to-bank transactions for peer-to-peer (P2P) transactions, disbursements, and more. But hurdles remain before real-time payments enter the mainstream.

Key Question: What are real-time payments, and how will they impact consumer payments growth?

Key Stat: From 2023 to 2028, real-time payment transaction volume will grow at a 31.7% annual rate, per GlobalData and ACI Worldwide. But real-time payment systems must overcome major hurdles to become mainstream.

Executive Summary

• Real-time payments are just getting started in the US, and strong growth lies ahead. From 2023 to 2028, real-time payment transaction volume will grow at a 31.7% rate, per GlobalData and ACI Worldwide. Early use cases include peer-to-peer (P2P) transactions and disbursements.
• Real-time payments can revolutionize how consumers pay. They offer instant access to funds, improved cash flow management, and late fee avoidance on a 24/7 basis. These benefits distinguish real-time payments from traditional payment models and other “faster” methods.
• Two similar systems enable real-time payments in the US, but FedNow has an edge among smaller financial institutions (FIs). Unlike its peer the RTP network, FedNow doesn’t require separate prefunded accounts for settlement, and it offers liquidity management transfers.
• Mainstream real-time payments adoption will be hampered by banks wary of infrastructure costs and fraud exposure. Transitioning to real-time payments requires massive system development investment, and these payments carry extra fraud risk.