In a move that could jump-start instant payments in the U.S., the Clearing House is raising the payment limit on its RTP network from $1 million to $10 million. The new limit will take effect on February 9, 2025.
“The higher transaction limit would enable more real-time payments use cases, especially higher-value transactions such as business-to-business transactions and real estate,” said Elisa Tavilla, Director of Debit Payments at Javelin Strategy & Research. “This is a positive development and could help accelerate instant payment adoption in the U.S.”
While businesses account for 80% of RTP transactions, 95% of these payments are received by consumers. This indicates there’s some room for growth in higher-dollar B2B payments.
The Clearing House is highlighting several use cases that will be enhanced by the increased limit, including:
- Real Estate/Title Insurance: With commercial and higher-value residential real estate payments now being sent instantly around the clock, more closings can be settled after business hours or on weekends.
- Merchant Settlement: Larger merchants and retailers can receive instant payments the same day they’re made, instead of waiting for a payout the following day.
- Supply Chain: Manufacturers can pay suppliers instantly, enabling quicker receipt of products and supplies.
- Cash Concentration: Businesses can more easily transfer funds to a single account, optimizing liquidity and streamlining fund consolidation.
“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,” said Margaret Weichert, Chief Product Officer at The Clearing House, in a prepared statement. “Customers already benefit from the system’s around-the-clock availability, with 42% of transactions taking place overnight, on weekends, or holidays.”
Staying Ahead of the Competition
Although the U.S. government launched its instant payments service, FedNow, last year, the RTP network remains the largest system of its kind in the country, averaging more than one million payments daily. On November 1, the network set a new single-day record, processing 1.45 million transactions valued at $1.24 billion. More than 285,000 businesses send instant payments over the RTP network each month.
The RTP transaction limit has been $1 million since April 2022, when it was increased from $100,000. This change followed a similar increase to the Same Day ACH transaction limit, also raised to $1 million, one month earlier. FedNow has a transaction limit of $500,000.