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Ask Hoot-E: Faster Payments Means Faster Growth for Your Organization

By Hoot-E posted 08-29-2025 11:51

  

Special thanks to @Sharon Hallmark, AAP, AFPP, APRP, Director, Payments Education for helping me write this blog!

The payments landscape is undergoing a seismic shift. With nearly 1,500 financial institutions joining the Federal Reserve’s FedNow® Service since its launch in July of 2023, and the continued expansion of The Clearing House’s RTP® Network, financial institutions of all sizes have an unprecedented opportunity to transform how they deliver value, compete in the market and grow strategically.  

The U.S. is now catching up to other countries in adopting instant payments infrastructure. The RTP® Network, launched in 2017, provides 24/7/365 real-time settlement capabilities. The FedNow® Service, launched in 2023, adds a public-sector alternative, enabling broad access and creating competitive momentum across the industry.  

Here are some strategic benefits your institution can leverage when implementing the FedNow® Service and RTP®:  

1. Enhance Client Value Propositions – Both consumers and businesses are demanding faster access to funds and seamless payment experiences.  

  • For Retail Customers: Offering instant peer-to-peer (P2P) payments, immediate disbursements (e.g., insurance claims, refunds) and real-time bill pay can boost client satisfaction and retention.  

  • For Commercial Clients: Instant payments enable businesses to improve liquidity management, payroll efficiency and vendor relationships by offering instantaneous payments.  

By embedding the FedNow® Service and RTP® into digital banking platforms, your institution can stay competitive with Fintechs and neobanks that already provide real-time experiences.  

2. Differentiate Through New Products and Services – Instant payments enable entirely new financial services that were not feasible before:   

  • Earned Wage Access (EWA) products  

  • Instant loan disbursements  

  • Dynamic invoice payments for small and medium-sized businesses (SMBs) 

  • Request for Payment (RfP) services  

By building value-added services on top of the FedNow® Service and RTP®, you can carve out new revenue streams while deepening relationships with account holders.  

3. Improve Operational Efficiency – By enabling instant, irrevocable transactions, your institution can:  

  • Reduce exceptions, returns and disputes.  

  • Minimize manual processing in ACH or check payments.  

  • Decrease fraud risk due to immediate settlement and transparency.  

  • Streamline reconciliation and liquidity management.   

Operational gains translate into cost savings, faster processing times and better use of internal resources, allowing more capital to be redirected toward innovation and strategic initiatives.  

4. Expand Market Reach – Smaller and mid-size financial institutions can use the FedNow® Service and RTP® to level the playing field:   

  • Partner with Fintechs or core providers to offer real-time capabilities without massive infrastructure overhauls.  

  • Compete with larger financial institutions through faster onboarding, more responsive payments and tailored services.  

  • Reach underbanked or underserved markets with instant access to funds and services.  

If you’re looking to grow your footprint, instant payments can be a powerful enabler of market expansion and client acquisition.  

To unlock these benefits, approach the FedNow® Service and RTP® adoption as a strategic initiative, not just a technical integration: 

  1. Define Clear Use Cases – Start with use cases that align with your clients’ needs and strategic goals, such as real-time bill pay, loan funding or P2P transfers.  

  1. Partner with the Right Providers – Core processors, Fintech partners and middleware providers can accelerate time-to-market. Choose partners who can scale with you.  

  1. Invest in Education and Outreach – Educate internal stakeholders and clients on the benefits and usage of real-time payments to build awareness and trust.  

  1. Ensure Compliance and Risk Management – Establish robust fraud controls, real-time monitoring and strong authentication frameworks to support instant settlement.  

By integrating the FedNow® Service and RTP® into a clear growth strategy, your financial institution can modernize operations, introduce innovative products and expand your market presence while ensuring resiliency to future industry shifts. By embracing instant payments today, your institution will be able to drive faster innovation, build stronger customer connections and maintain a competitive edge in an increasingly digital financial landscape. 

   

Dive into the world of instant payments with our Instant Payments Bundle! With 11 webinars, nine on-demand courses and our EFT Dispute Resource Package, you'll get practical guidance on FedNow®, RTP®, ISO 20022, risk management and origination strategies. For institutions ready to take the next step, our Instant Payments Enablement Service with DeNovo Treasury provides a hands-on, expert-driven framework to plan, launch and optimize instant payment solutions. 
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