How Instant Payments Can Turbocharge Your Company's Finances

As companies and consumers increasingly demand faster, more secure transactions, businesses are discovering new ways to enjoy the benefits of instant payments. Instant payments are a secure and versatile method that allows businesses to make and receive payments, purchase supplies, and settle bills in real time, 24/7, every day of the year.

The volume of instant payment transactions has grown significantly in recent years. This form of payment boasts many features not offered by traditional payment methods, such as Automated Clearing House (ACH) transfers, which settle in batches during business hours, while instant payments, also known as real-time payments, go through immediately.

Two Instant Payment Channels

There are two networks for instant payments, RTP and FedNow.

The Clearing House’s eight-year-old RTP network reached 100 million transactions valued at $163 billion in the first quarter of 2025 – up 2% and 103% respectfully – over the previous quarter. Fifth Third is a member bank of the Clearing House and is one of the largest processors on the network.

The Federal Reserve launched its FedNow service in 2023 and says more than 1,100 financial institutions in all 50 states now participate. This shift is largely driven by the consumer experience; users increasingly expect immediate access to their funds, as seen with platforms like Zelle^® and PayPal.^®

Most American businesses and individuals already have access to instant payments through their banks, and more merchants and financial technology companies are discovering seamless and secure new ways to move money instantly.

"At present, the two instant payment providers collectively encompass approximately 70% of all checking and savings accounts in the United States. There are only negligible differences in their respective fee structures and capabilities, with an overlap of approximately 98%," says Jessika Wood, senior vice president and head of commercial payment products for Fifth Third Bank.

"Consider it as two networks, but one integrated solution," she says. "Fifth Third offers the advantage of leveraging both networks. In the event of a network failure, we can redirect the payment through the other network, due to the redundancy with other banks."

Drivers of Growth

The growth in instant payments is driven largely by consumer demand, according to Jim Douglas, vice president, commercial payments, at Fifth Third Bank. Consumers have come to expect immediate results in many other aspects of their lives, from shows on demand to same-day delivery, and payments are no different, he says. "The payment is the experience. If you’re a consumer expecting a payment, speed matters. If it takes days with one vendor and minutes with another, it’s a simple decision." That in turn spurs innovation from merchants. "When consumers want something, the market flexes," says Douglas. This demand is driving more B2C businesses to adopt instant payment solutions to enhance customer satisfaction.

Technological advances, including the rise of digital wallets and mobile payment solutions, have facilitated the integration of instant payments into everyday transactions. Companies are leveraging application programming interfaces (APIs) to streamline payment processes, making it easier for businesses to adopt these technologies. APIs are digital messengers that make possible the necessary real-time communication between banks, merchants, and consumers that enable fund transfers in less than 10 seconds, while ensuring security is at all times maintained.

API connectivity is the perfect complement for instant payments, utilizing user authentication tokens to validate customer credentials, route payments to the recipient’s bank, and arrange settlement via ACH or card networks. Additionally, APIs can incorporate features such as fraud detection, loyalty programs, and subscription payments, further enhancing their utility and security.

New Adopters of Instant Payments

There are several key sectors embracing instant payments:

1. Gaming and digital wallets: Instant payments are particularly beneficial in the gaming industry, where users expect immediate payouts. Companies like DraftKings and Robinhood are leveraging instant payment systems to enhance user experience and build trust by providing instant access to winnings or trading proceeds.
2. Merchant payments: Small businesses such as food trucks benefit from instant payments by receiving funds immediately after sales, allowing them to reinvest quickly and manage cash flow more effectively.
3. Third-party payment processors: Third-party payment processors like PayPal leverage instant payments networks to offer their merchant clients fast and convenient payment options for their large volume of customers. Leading third-party processors like Stripe and Trustly have partnered with Newline by Fifth Third for its best-in-class APIs, which can be embedded into their workflows, seamlessly integrating payments, card, and deposit solutions directly into their platforms. The API also enables them to retrieve data about a payment’s status, communicating via the payment rail and sending information along with the funds. Stripe, for example, used APIs to process $1.4 trillion in payment volume in 2024, up 38% from the prior year.
4. Government transactions: Instant payments can streamline processes like tax payments and fines, reducing the time and cost associated with traditional methods. Some states are exploring these options to improve efficiency and reduce fraud.
5. Insurance: Companies use instant payments to securely collect premiums and pay out claims.
6. Construction: Small business entrepreneurs can obtain payment instantly from a customer in the morning to purchase materials for another job in the afternoon, avoiding the need for credit.

Emerging Use Cases

• Request for Payment (RfP) can transform how companies send an electronic payment request to a customer. Through this digital invoicing and payment request feature, customers can review the invoice and pay instantly using real-time payment rails. Because payments are instant, the biller does not have to wait for a check or ACH payment, improving their working capital. RfPs also save the merchant credit card processing fees and are generally cheaper to process than a check or ACH payment. RfPs also can reduce fraud because they are processed digitally through bank-to-bank communication. They are particularly useful for recurring payments like utilities and taxes.
• Payroll and reimbursements: Instant payments can revolutionize payroll systems, allowing employees to access earned wages immediately rather than waiting for traditional pay cycles. Restaurants and other businesses can pay out wages immediately at the end of a shift.

Eliminating Risk

Instant payments could also help mitigate the risk of rejection for insufficient funds. Checks and ACH payments can require days to process, which could lead to a failed transaction if the payee’s account does not have the necessary balance at the time of settlement. Instant payments, on the other hand, require real-time verification of account balances, and funds must be available when the transfer takes place. Merchants receive immediate confirmation that the payee has the funds available, and payments cannot be initiated if there are insufficient funds. This reduces the risk of payment returns, which can cost the merchant substantial fees. This function makes instant payments particularly attractive to merchants that direct-debit monthly fees, and to schools and universities that debit tuition payments, which routinely deal with returned payments.

In large transactions, such as remittance of earnest money in home purchases, the RfP feature relieves the purchaser of having to order a wire transfer and alleviates some of the risk of fraud or error: The title company can request an instant payment, and the purchaser logs on to their bank account to confirm the transaction and make the payment.

"From a security standpoint, you don’t have to worry about a phishing attack or somebody sending wrong credentials to your inbox," says Douglas.

Key Considerations When Implementing Instant Payments

Business leaders interested in adopting instant payments should begin with a conversation with their banker, finance teams, and information technology staff or partners. Thanks to innovation in the technology for instant payments, companies don’t need sophisticated IT departments to implement transactions. Instead, by partnering with a bank such as Fifth Third that has built the sophisticated infrastructure, the network, compliance framework, and security are already in place. In addition, APIs can be easily integrated into a merchant’s systems without sophisticated coding.

Considerations include how much liquidity a business has, how fast it needs to move money, and how frequently. Because of the increased demand for B2B transactions, the RTP^® network recently raised its maximum transaction amount from $1 million to $10 million. In the summer of 2025, the transaction limit for FedNow^® will rise from $500,000 to $1 million. Among other requirements, payments on both systems are limited to the U.S.

It’s also important to understand the implications for cash flow and operational processes. A major benefit is reducing the need for accounting departments to manage the company’s float—the time between payments requested and received. With instant payments there is real-time visibility into cash flowing in and out, reducing reconciliation issues and improving forecasting and liquidity management. Teams will no longer have to keep track of pending payments.

The future of instant payments is bright, with significant potential to transform how businesses and consumers interact financially. As technology continues to evolve and consumer expectations rise, stakeholders must adapt to this new landscape. To be competitive, companies need to innovate. By embracing instant payments, businesses can enhance customer satisfaction, improve cash flow, and stay competitive in an increasingly digital world.