Lorien Carter, Senior Research Analyst at Juniper Research, explains why real-time payments are the industry standard within Europe, but lag behind in the US. Juniper Research delivers strategic insights into financial technology markets across the world.
Real-time payments are the gold standard of retail, business, and personal payments. While legacy systems settle within days, instant payment systems are available 24/7, 365 days a year, and settle in seconds. This makes it an excellent digital substitute for cash when paying for goods and services requiring on-the-spot payment, or splitting a restaurant bill with friends.
What FedNow enables
FedNow is an instant payments service developed by the US Federal Reserve Bank and built on the ISO 20022 messaging standard; offering real-time gross settlement to financial institutions.
The network has the potential to transform a wide range of payments use cases, including:
- Immediate earned wage access
- Insurance claim payouts
- Emergency relief disbursements
- Real estate transactions
- B2B supplier payments
Has FedNow failed?
At its launch in July 2023, the Federal Reserve stated its ambition to connect 8,000 financial institutions to FedNow. Progress towards this has been gradual. One year after launch, only around 900 financial institutions were connected, and only 40% of those had signed up to send payments. Since then, it took another two years for participation to double, and in Q2 2026 it recorded 1,800 participants.
With many US banks outside the network, participants have a limited opportunity to route payments through FedNow. As a result, only a minority of banking transactions are sent instantly.
Competition has slowed adoption
The late entry of the Federal Reserve into the instant payments market has allowed competing real-time networks to spring up, leaving banks to figure out which network to connect to. The RTP Network, launched in 2017 by a consortium of private banks, was created to fill the space before the Fed entered the market. While RTP provides similar instant payment capabilities, participation has historically been concentrated among institutions within The Clearing House consortium.
Instead of converging around a single national infrastructure, banks have had to decide which network – or both – best suits their needs. This fragmentation has inevitably slowed overall market adoption.
The path to instant payment success in Europe
While Europe initially experienced a slow start, the implementation of regulations ensured universal availability. Instant payments were operationally established in 2017 in Europe as part of the SCT Instant scheme, but did not initially gain much traction. By 2024, only 11% of all transfers were instant, and one third of EU PSPs did not offer it as a service.
The turning point for adoption came with the establishment of the Instant Payments Regulation in 2024, which made the provision of instant payments a regulatory baseline across the EU. As of October 2025, all PSPs operating in the EU were required to offer instant payment services at an equal fee to regular settlements.
Why was Europe a success?
European countries were markedly early adopters of real-time payments. The UK launched its Faster Payments service in 2008; making it one of the first major real-time payments systems in the world. However, the payments environment made it uniquely suited to do so. When Faster Payments launched in the UK, 10 financial institutions committed to the service. While this seems small, these banks accounted for 95% of payments’ traffic.
On the other hand, the US faces a systemic barrier from the outset. There are over 8,000 eligible commercial banks. For any instant payment network to deliver maximum value, a significant proportion of these institutions must participate. Until that critical mass is reached, many smaller banks have limited incentive to invest in connectivity.
The fragmented banking market is why regulation is essential to achieving network effects and standardising instant payments in the US.
Looking to the future of FedNow: signs of growing momentum
Despite its slow roll-out, FedNow is showing encouraging signs of growth.
In Q2 2026, payment volumes on the network increased by 80%, compared with the previous quarter. The growth was driven by 111 additional financial institutions joining the service, alongside increased usage from existing participants.
The Federal Reserve has also raised FedNow's transaction limit from USD 1 million to USD 10 million; significantly expanding its suitability for higher-value commercial transactions such as B2B supplier payments, and certain real estate transactions.
These changes will further incentivise usage. Juniper Research forecasts that the total value of instant domestic payments in the US will grow from USD 5.9 trillion in 2026 to USD 28.5 trillion in 2030; reflecting growth in value and frequency of instant transactions.
Source: Juniper Research’s Instant Payments Report 2025-2030
However, reaching the scale required for instant payments to become the default in the US will depend on greater coordination within the payments ecosystem, as the European example demonstrates.
About the author
Lorien Carter is a Senior Research Analyst at Juniper Research, specialising in forecasting emerging trends and innovations in fintech markets. Lorien’s recent work includes writing the Cross-border Payments Report, as well as working as a consultant with firms looking to analyse consumer attitudes across global markets.
About Juniper Research
Juniper Research is a global tech strategist firm providing research, data, and forecasting across the fintech, telecoms, and IoT sectors. For over 20 years, Juniper Research has delivered actionable insights that help industry leaders navigate disruption, seize opportunities, and make confident strategic decisions.
