FedNow Increases Transaction Limit to $10 Million

The Federal Reserve’s instant payment system is increasing its transaction limit amid growing commercial demand.

The FedNow® Service’s network transaction limit is set to increase from $1 million to $10 million, Federal Reserve Financial Services announced Tuesday (Sept. 9).

This shift, the second increase this year, is designed to let financial institutions and businesses support higher-value use cases and reflects a rising need for speed and certainty in the payments ecosystem.

“Our second transaction limit increase this year reflects the growing demand for instant payments — as the benefits of immediate funds availability for all types of payments become more apparent, financial institutions need flexibility to serve customers and support internal processes,” said Mark Gould, chief payments executive for Federal Reserve Financial Services. “The FedNow Service is shaping how we move money, and the service will continue to be flexible to meet evolving feedback and increasing demand.”

FedNow says the new limit, set to go into effect in November, is designed to support things like corporate treasury transactions, corporate payroll transfers, and vendor payments.

“Financial institutions will continue to have flexibility to set lower transaction limits based on internal risk parameters and business needs,” the announcement said.

Recently introduced risk mitigation tools like account activity thresholds also provide participants with greater control and confidence as they expand their instant payment offerings.

The Federal Reserve announced in June that it was increasing the transaction limit for payments sent across the service from $500,000 previously in place to $1 million. That move followed a February increase in the transaction limits sent via The Clearing House’s RTP® network, raising that threshold from $1 million to $10 million.

The new limit comes at a time when, as PYMNTS wrote Tuesday, the U.S. is coming to a tipping point in terms of faster money movement.

Adoption of FedNow and RTP is speeding up, with daily volumes surpassing 1 million transactions. Nearly every bank surveyed by PYMNTS Intelligence said it is feeling customer pressure to enable instant payments.

“But even as executives voice urgency, the infrastructure changes to support them remain uneven,” PYMNTS wrote.

The research found that three-quarters of mid-tier banks plan to adopt both the FedNow Service and the RTP network in the next two years, with almost a third saying their clients want access to both services.

And 93% of banks that allow instant payments say they’ve seen a positive impact on customer retention, highlighting the clear return on investment.