Friday, December 6, 2024
The increased limit aims to support growth on the network, including real estate, supply chain payments and business-to-business transactions, TCH said in a statement.
"We have heard from many of our corporate customers that they have a need to send higher-value instant payments to meet today's growing business needs," said Matt Richardson, executive vice president of Citizens Financial Group. "Raising the RTP transaction limit will allow our corporate customers to send larger payments for a variety of needs, including payments outside traditional business hours."
The new transaction limit will become effective Feb. 9, 2025.
"The $10 million transaction limit allows financial institutions and their customers to make larger payments in real time, continually enabling the RTP network to evolve to meet industry needs," Margaret Wiechert, chief product officer at TCH, said. "Customers already benefit from the system's around-the-clock availability, with 42 percent of transactions taking place overnight, on weekends, or holidays. This aligns with how businesses operate in today's 24/7 economy."
One of the applications for the increased limit cited by TCH is merchant settlements. Larger merchants and retailers will soon be able to receive daily instant payments instead of payouts a day or more later, as is the case today, TCH noted in a press release. Businesses will also be able to conduct cash concentrations more easily, moving funds more easily to single accounts to optimize liquidity or consolidate funds at the end of the month or an operating quarter.
More than 285,000 businesses send instant payments over RTP each month using one of an estimated 650 financial institutions operating on the system. In November 2024, the network surpassed half a trillion dollars ($500 billion) in payments since the network was launched, seven years ago.
Currently, it averages 1 million payments a day. In October, the RTP network handled a record 31.9 million transactions valued at $25.7 billion.
RTP is not the only instant payment network operating in the United States. The Fed operates a competing system known as FedNow, which also operates on a 24/7 schedule. FedNow serves more FIs than RTP, but its transaction limit is $100,000, and importantly, the two networks are not interoperable.
The Fed has not been particularly forthcoming about FedNow operational specifics. But recently, in a report to the Fed Board, staffers noted that volume on the network has been "modest" which, they explained, is consistent with expectations.
From January through August of 2024, FedNow handled just 414,827 transactions. Also during that period, the number of participating FIs grew to just under 1,000 from 400.
"Broad adoption of the FedNow service across an industry with more than 9,000 financial institutions will be a gradual journey, similar to other payment services like Fed ACH in the 1970s and 1980s," the staff wrote in its memo to the Board. They added that they expect "acceleration over time as more financial institutions join the network and as the Reserve Banks release new service features on an ongoing basis." 
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