Myth Busting: 3 Truths About FedNow

Jan. 25, 2023

Instant payments have arrived.

In the five years since the launch of the RTP Network, volumes have steadily increased by more than 10 percent per quarter, and in Q3 2022, the network moved 45 million transactions valued at $19.7 billion. Of those transactions, more than 225 of RTP-enabled financial institutions are less than $10 billion in assets and on the receiving end of these payments. 1

In fact, every RTP-enabled community bank we’ve spoken with has had RTP volume within hours of going live.

This data tells a story of a steady climb in customer adoption of instant payments. And, with the FedNow launch mere months away, volume is expected to continue to grow. Community banks have an opportunity to be early adopters of FedNow and capitalize on this momentum.

Resources for you and your staff: Ramping Up for the FedNow Launch Webinar Series

To complement your FedNow knowledge, ICBA Bancard has developed a five-part webinar series:

  1. Delay No More: Creating Your FedNow Plan

  2. FedNow Features, A Deep Dive

  3. Lessons Learned from Community Banks Implementing Instant Payments

  4. Preparing for 2023 and Q&A with a Fed Expert

  5. Exploring Instant Payments Use Cases

For more information, visit the ICBA Bancard website.

But first, they need the facts. So, we’re dissecting and debunking the three top myths we’ve heard about FedNow:


Implementing FedNow will be a huge undertaking, and the management of its operational, technology, and security-related considerations will be too difficult.

TRUTH: Receive-only implementation offers a path to start with instant payments in a streamlined, cost-effective manner.

Even banks that plan to move into instant payments origination don’t have to start there; getting your feet wet with receive-only is a way to support your customers’ desire to be paid instantly and phase in this new opportunity. In fact, the community banks we’ve spoken with in the FedNow pilot have shared that getting set up to receive was much easier than they expected. Talk to your providers for more info on how light the lift could actually be.


There’s no immediate demand for instant payments and my customers are not asking for them.

TRUTH: Industry research continues to point to customer demand for and a willingness of small- and medium-size businesses to pay for instant payments.

According to the Federal Reserve, 60 percent of businesses are looking for quicker access to funds and another 57 percent want to be able to post immediately or automatically to customers’ accounts. You don’t want your customers to be disadvantaged compared to your competitors with regards to instant payments. Signing up to receive will allow your bank to create surprise and delight moments for your customers rather than having them wonder why you don’t offer immediacy.


It will take years before FedNow, and instant payments affect community banks.

TRUTH: Community banks already are being impacted by instant payments.

As RTP volume demonstrates, the use of this payment type has already begun. Once government organizations, major payroll processors, large insurance companies, and other sizeable entities tap into FedNow, volume will climb rapidly. Now’s the time to get set up to receive so that you can be ready for the large organizations who will enable these payments for your customers.

So, as you set your community bank’s FedNow plan in place, continue to educate yourself on the service and its opportunities [see sidebar]. Consider the ways in which your customers can derive value from receive-only transactions, and then start on that journey. Talk to your current and prospective providers about timing and costs. And then set yourself up to receive instant payments.

Because the time for action has arrived.

11) All of the stats come from here. The 225 was calculated by taking 80% of the financial institutions on RTP being less than $10 billion and applying that to the 285 that are enabled.