The payments landscape is shifting rapidly, and real-time payments (RTP) are no longer just an emerging trend. They're becoming a competitive necessity. As of fall 2025, over 1,400 financial institutions are participating in the FedNow Service, and adoption is accelerating. According to the 2025 What's Going on In Banking Report, 45% of banks and 38% of credit unions have already implemented RTP, although most currently only receive payments. Another 42% of banks and 52% of credit unions have yet to deploy RTP but have concrete plans to do so.
This surge in interest marks a transition from early adoption to the "fast follower" stage. Financial institutions that delay participation risk losing out on significant deposit flows, transaction revenue, and an opportunity to differentiate themselves, particularly among business account holders demanding real-time settlement.
While banks and credit unions still face challenges when implementing instant payments, there's strategic ways to overcome them:
1. 24/7 Support Considerations
Real-time payments operate around the clock, which differs from traditional batch processing. While some institutions worry about the operational impact of 24/7 transaction processing, the transparency and automation of instant payments significantly reduce the burden. Additionally, any initial investment in staffing or technology is likely to be offset by the revenue growth from offering instant payments.
2. Fraud Concerns
A common misconception is that receiving instant payments is low-risk, while sending payments presents high risk. While official fraud data for both networks has yet to be released, industry feedback suggests minimal fraud occurrences.Furthermore, both the Federal Reserve and The Clearing House have recently raised their transaction limits, signaling confidence in their ability to mitigate fraud.
To address concerns, financial institutions must develop internal fraud management expertise and implement advanced fraud monitoring tools. The key to managing fraud isn't just technology; it's building a culture of fraud awareness and response readiness.
3. Technology Integration Challenges
Integrating new payment technology with legacy systems is a common roadblock. With both networks, financial institutions bear the responsibility of embedding real-time payments into their existing infrastructure. While some core providers offer integration support, banks and credit unions need a clear vision for how instant payments fit into their broader digital strategy. Selecting a third party service provider (TPSP) with seamless integration capabilities is essential to ensuring a smooth transition.
4. Timing and Deployment Realities
Implementing instant payments isn't an overnight process. Many core banking providers and vendors have extensive implementation backlogs, meaning institutions eager to adopt instant payments may face delays.
Given this reality, financial institutions should begin preparations now, even if the initial steps are small. Engaging with technology partners early can help streamline implementation and position banks and credit unions to take advantage of real-time payments as quickly as possible.
Partnering for Success in Instant Payments
Real-time payments represent a major opportunity for banks and credit unions to enhance their value proposition. At Pidgin, we help financial institutions navigate the complexities of instant payments with our API-driven platform, which serves asa translation layer between RTP and FedNow. This ensures seamless transaction processing, regardless of the network.
If your financial institution is ready to move beyond the planning phase and fully embrace real-time payments, our experts are here to help. Contact us today to explore how Pidgin can take your payments strategy to the next level.
