FedNow has continued to expand its network of financial institutions since its launch two years ago, and now PNC Bank is joining the real-time payments system.
The platform operated by the U.S. Federal Reserve now includes roughly 1,400 participating financial institutions. However, the addition of PNC is noteworthy—not only because the bank is one of the largest financial institutions in the U.S., but also because it was one of the last remaining holdouts.
JPMorgan Chase and Wells Fargo joined FedNow earlier, while Bank of America, Citigroup, and PNC had been more reluctant to participate. With Citi now on board and Capital One announcing its intention to follow suit, the number of major U.S. banks not participating in the platform continues to shrink.
Considering the Competition
One of the main reasons many banks were slow to adopt FedNow is that they are members of the Clearing House, a consortium of the world’s leading financial institutions. The Clearing House launched the RTP network in 2017, a real-time payments platform competes with FedNow.
Although PNC is a founding member of the Clearing House, the bank’s support for the FedNow system shouldn’t be interpreted as a lack of confidence in the RTP network. In fact, the RTP network recently set a new daily transaction record, processing over 1.8 million transactions, and continues to broaden the range of use cases on its platform.
Joining the FedNow Fold
While FedNow may have roughly the same number of institutions on its platform as RTP—or even more—it has not yet reached the payments volume of the more established network.
However, FedNow has continued to make strides. The system recently raised its transaction limits, first to $1 million and then to $10 million, positioning FedNow to handle high-value transactions like the B2B payments that have gained traction on RTP.
The addition of PNC Bank to the FedNow fold is another vote of confidence in the platform and could signal the future of U.S. real-time payments. As instant payments continue to gain ground, there may be room for both RTP and FedNow to coexist and thrive.
