93% of Banks Say Instant Payments Boost Retention

Headlines swirl with urgency around real-time payments, but the reality is that most banks are still dragging their feet. While financial institutions (FIs) say instant payments are a top priority, the number that have made the necessary system upgrades remains far lower.

The gap between intent and execution is emerging as one of the most pressing challenges in the race to modernize U.S. payment rails.

The recent report, “Pivotal Moment: Banks’ Real-Time Payments Opportunity in 2025,” produced by PYMNTS Intelligence and sponsored by Galileo, finds the United States is reaching a tipping point when it comes to faster money movement.

Adoption of real-time payment networks such as The Clearing House’s RTP and the Federal Reserve’s FedNow is accelerating, with daily volumes exceeding 1 million transactions. Nearly every bank surveyed said it feels pressure from customers to enable instant payments. But even as executives voice urgency, the infrastructure changes to support them remain uneven.

• 75% of mid-tier banks plan to adopt both the FedNow Service and the RTP network within the next two years, with nearly one-third saying their clients demand access to both.
• 93% of banks that enable instant payments report a positive impact on customer retention, underscoring the clear return on investment.
• 50% of institutions are turning to payments-as-a-service providers as the most effective way to implement real-time capabilities, reflecting a preference for outsourcing over building new systems in-house.

The report points to a notable gap. While 14% of banks and credit unions said they intended to select a new or replacement payments hub in 2024, only 4% actually did so. The rest are caught between the costs of overhauling legacy systems and the competitive risk of standing still. Payments-as-a-service partnerships, such as Red River Bank’s collaboration with Allied Payment Network, are emerging as a workaround. But reliance on third parties also raises questions about long-term control of core financial infrastructure.

Corporate clients are driving much of the pressure on FIs. More than 6 in 10 commercial banks say businesses now view real-time payments as non-negotiable. Large-ticket transactions in real estate and supply chains, which often fall between $1 million and $5 million, are pushing networks to raise limits; RTP now allows up to $10 million per transaction.

For consumers, the appeal is no less direct: nearly 4 in 5 say instant payments are the most important digital feature a bank can offer, ranking higher than mobile wallets or artificial intelligence (AI)-based budgeting tools.

Still, the broader reality is that adoption remains uneven. Banks know the benefits — higher retention, new revenue streams such as instant payroll and competitive parity with FinTech challengers. But they are weighed down by compliance concerns, operational complexity and the inertia of systems built decades ago.

The report forecasts that instant payments will represent 16% of global payments by 2027, rising to 22% the following year. Between 70% and 80% of financial institutions worldwide are expected to be capable of receiving instant payments by 2028. In the U.S., more than two-thirds of companies anticipate joining a real-time rail in the next two years, further underscoring the inevitability of adoption.

For banks, the message is clear. Time is running out to capture the early-mover advantage. Those that stall risk not just losing ground to FinTechs but also to traditional rivals already moving ahead. The question is no longer whether real-time payments will become standard — but how quickly banks can bridge the widening gap between their rhetoric and their reality.

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