FedNow will raise the limit on many of its real-time transactions to $1 million later this summer. It will also implement new risk mitigation features to help financial institutions feel more confident in sending payments at the higher limits, a key factor in the network’s growth.
The service’s new account activity threshold functionality will allow participants to set value and velocity thresholds by customer segment, aligning with their unique business needs and risk tolerance. The new $1 million limit will apply to higher-value credit transfers, including business-to-business supplier payments, real estate transactions, and payroll account funding. The default transaction limit will remain at $100,000.
According to FedNow, the account activity threshold enables participants to establish multiple risk management strategies based on different scenarios. For example, a financial institution might set a higher cumulative threshold for business customers and a lower one for new account holders.
Recently, FedNow’s competitor in instant payments, The Clearing House, raised its RTP network payment limit from $1 million to $10 million. This followed a similar increase in the Same Day ACH transaction limit, which also rose to $1 million.
Keeping Up in the Instant Payments Arena
More than 336,000 transactions were settled on FedNow in Q4 2024, with consumers and businesses sending an average of $190 million through the service per day. However, those figures pale in comparison to RTP, which processed 343 million transactions throughout 2024.
Beyond intensifying its competition with RTP, FedNow is also working to encourage more institutions to enable send capabilities. This feature is critical for driving instant payments adoption, yet the vast majority of the 1,100 banks on the platform remain receive-only.
Overall, FedNow has seen significant recent expansions. In February, FIS announced it would become one of the first fintech providers certified to enable send capabilities for credit transfers on FedNow.
