The Clearing House recently announced an update regarding their Real Time Payments (RTP) network transaction limit being raised from $1M to $10M.
Bank of New York Mellon (BNY) has successfully leveraged this advancement and completed the largest instant payment in US history, a $10M inter-company liquidity management payment.
BNY’s instant payments software partner, Volante Technologies, reportedly made this achievement possible as their technology was leveraged in this particular case.
Deepak Gupta, Global EVP of Volante and a US Faster Payments Council board member, commented on what this milestone means for the future of the payments space.
Our conversation with Deepak Gupta is shared below.
Crowdfund Insider: For those unfamiliar with the news, could you summarize the RTP/BNY story?
Deepak Gupta: On Feb 10, 2025, the Bank of New York Mellon Corporation (BNY) sent a $10m RTP instant payment to Bank of America, the largest RTP transfer in history. This was the day after The Clearing House (TCH), the organization that runs the RTP network, raised the limit on RTP transactions from $1m to $10m, a move that TCH had signaled in Dec 2024.
The transaction was an “inter-company liquidity management payment”, which is a kind of high-value payment exchanged between banks, or banks and corporate/custodial partners, that is most usually routed as a Fedwire, or “wire”.
Crowdfund Insider: How does this differentiate RTP from FedNow? Will it make RTP more attractive than FedNow for some applications / use cases?
Deepak Gupta: This does, for now, differentiate RTP from FedNow because FedNow’s limit is currently 100K by default, with financial institutions able to raise the limit to 500K for some customers. RTP’s $10m limit is an easy order of magnitude greater, which certainly will open up a wider range of use cases.
That said, since the Federal Reserve can choose to raise its own limit at any time, the advantage is likely temporary. It is also worth noting that while a network may allow a $10m transaction, many banks will choose not to offer the higher limit to their customers until they have tested the waters. As a case in point, Zelle users may be able to send only up to $500 with some financial institutions, and over $10,000 with others.
Crowdfund Insider: Will more wires/ACH move to RTP?
Deepak Gupta: Since the average value of a wire in 2024 was $5.4m, well below the $10m RTP limit, the answer is a clear ‘yes.’ The critical question, however, is when and how many? We predict that the transition will be slow, for the following reasons:
One is that the number of banks that offer Fedwire services is still much smaller than those that have commercialized their RTP offerings. The majority of banks connected to networks like RTP and FedNow tend to start with “receive only” offerings, so the number of sending banks is smaller.
Fraud is another major concern. When the network limit moved to $1m, not all connected banks immediately raised their customer limits, instead taking the time to ensure the right fraud and risk controls were in place. A $10m payment limit also opens up the possibility of a $10m fraudulent payment.
Inertia is another challenge. Most wire payments are B2B payments routed through treasury or enterprise resource planning (ERP) systems that are set up in a certain way to initiate wires. Banks are also set up to receive these payments in a certain way. Adoption will likely be slow unless banks actively educate their customers about the benefits of RTP and offer RTP products that are easy to use and that seamlessly integrate with their existing treasury/ERP systems.
However, these are merely headwinds, not fundamental impediments. In the long run, as RTP and FedNow continue to evolve their services, US consumers and businesses will benefit from greater choice in when and how to make payments, and we expect volumes across all payment types to increase, as they have been doing to date.
Crowdfund Insider: What use cases are now best suited to RTP versus FedNow?
Deepak Gupta: The “inter-company liquidity management payment” is a good example of such a payment use case. In principle, any use case for a payment up to $10m that is typically settled through a wire—corporate loan disbursement, large vendor payment, intraday liquidity settlement, commercial real estate closing—can now be done through RTP instead. Most of these will be B2B payments.
Crowdfund Insider: What industries might benefit or be affected by this?
Deepak Gupta: Any industry where multi-million-dollar transactions are a regular occurrence can benefit from the opening up of RTP as a payment mechanism choice. These include commercial real estate, corporate lending, capital markets, corporate treasury, manufacturing—the list is extensive.
Crowdfund Insider: What is the significance of BNY’s achievement?
Deepak Gupta: BNY has a long tradition of being first in the RTP arena – they processed the first-ever RTP in 2017, followed up by launching an innovative real-time bill pay product shortly after, and now they have sent the first $10m payment. Further, larger banks like BNY often provide payment services to small banks via their white label model, so this means that more smaller banks will be able to access the benefits of RTP and for larger transaction amounts.
This has a significance beyond BNY, however. It shows that the RTP network is alive and well and growing, and that financial institutions looking to offer real-time payments to their customers need to think in terms of an “all of the above” strategy, i.e. RTP and FedNow rather than one or the other. This is because the two networks will continue to grow and evolve, and at any given point in time, one will be better for some use cases than others. Banks and other financial institutions can best serve their customers now and into the future by offering the greatest variety of services.
The other area of significance is in the technology realm. It shows that banks like BNY with the right technological approach—that is to say, a natively real-time 24×7 payment processing infrastructure—can innovate and differentiate based on the quality of their payment services, and can get to market faster with RTP products.
That should be both an encouragement for those who are planning to get into the RTP race, as well as a warning for those who are yet to commit.