How Banks Are Making Instant Payments Interoperable

The future of instant payments in the United States hinges on a balance, as financial institutions navigate the complexities of fragmented networks by embracing dual-rail strategies.

It’s a pragmatic, albeit challenging, path to a broader market reach. The PYMNTS Intelligence report “Instant Impact: Why Real-Time Payment Success Hinges on Optionality,” a collaboration with The Clearing House, highlights the growing demand for real-time payments, with 8 in 10 respondents to the 2025 U.S. Faster Payments Barometer calling them a “must-have” capability.

Mastercard projects 289% growth in real-time payments transaction value from 2023 to 2030, driven by the expansion beyond peer-to-peer (P2P) and consumer-to-business (C2B) into business-to-business (B2B) and business-to-consumer (B2C) use cases.

To counter this fragmentation and ensure comprehensive market access, many financial institutions are opting for a “dual-rail” approach, connecting to both the RTP® network and FedNow® Service.

The RTP network transmits over 96% of the overall instant payments volume in the U.S. and covers approximately 71% of deposit accounts, while the FedNow Service reaches about 35% of bank accounts.

This dual-rail strategy is adopted by 58% of financial institutions offering instant payments to sidestep interoperability gaps.

While this extends network coverage and boosts payment resilience, it also compounds integration challenges, adds cost and increases operational complexity.

Businesses still face inconsistent capabilities across banking partners, and tech providers struggle to support competing formats and standards, leading to slow, fragmented and expensive integration.

Running multiple real-time rails exacerbates liquidity fragmentation and capital strain, as banks often lack real-time visibility into balances scattered across siloed systems, impeding efficient capital allocation and balance sheet risk management.

While 92% of U.S. banks offering instant payments are considering interoperability between payment schemes, only 2% have put interoperability into practice. This gap highlights technical and operational barriers, even as banks recognize interoperability’s potential to reduce costs, improve fraud detection and widen access.

Beyond the dual-rail dynamic, the report reveals that views on interoperability have matured, with the share of firms calling it “very important” dropping from 74% in 2021 to 61% in 2024, reflecting what PYMNTS found to be a “growing realism about costs and trade-offs.”

However, global data from the International Monetary Fund (IMF) supports the notion that interoperable payment systems boost retail digital payments by lowering adoption barriers and promoting financial inclusion.

PYMNTS Intelligence recommends several strategies to accelerate progress, including using modern payments-as-a-service (PaaS) platforms, which provide a single point of access to multiple networks, thereby reducing operational friction.

ISO 20022 enables structured data exchange and supports automation for compliance, fraud detection and reconciliation across networks, facilitating global communication and compatibility.

Ultimately, the journey toward a unified, resilient real-time payment infrastructure depends on the coordinated efforts of financial institutions, technology providers and policymakers to bridge the gap between aspiration and practical interoperability.

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