Latest news with #transactionLimit
Yahoo
27-06-2025
- Business
- Yahoo
FedNow delivers new risk management tools
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. FedNow raised the transaction limit for real-time payments to $1 million on Tuesday, from $500,000, the Federal Reserve said in a website post. The Fed has also added new security features, enabling financial firms to limit the dollar amount and transaction speed depending on the customer segment. Banks can now customize how much money their long-standing business customers or individual account holders can send instantly through the network, the Fed said. 'These new value-added features offer FedNow participants more options to customize their instant payments profile, adding to the suite of available tools that allow financial institutions to tailor activity according to risk management needs and customer activity,' Mark Gould, chief payments executive for Federal Reserve Financial Services, said in the post. The Federal Reserve stuck with a prior February plan to raise the limit for FedNow's real-time transactions and allow banks to set parameters on different customer segments. The agency made the move to make its instant-payment service more appealing to banks. 'Feedback from the industry has been invaluable, and we intend to remain agile and responsive to new and changing customer needs as instant payments grow and mature,' Gould said in a Fed's statement. Since its launch two years ago, FedNow's growth has continued apace. It has added roughly 1,400 banks and credit unions to its network across the country, according to the update this week, up from about 1,300 earlier this year. The bulk (95%) of financial institutions on the FedNow network are community banks and credit unions, the Fed's Tuesday post said. The central bank launched the network in July 2023, partly to cater to smaller financial institutions that had been less interested in joining the private rival RTP network run by their big bank rivals through The Clearing House. Both systems have had difficulty luring financial institutions to adopt capabilities for sending payments, as well as receiving payments because the former are perceived as more risky. Indeed, fraud prevention remains a significant hurdle in spurring adoption and use of instant payments in the U.S. Of payment processors and bank technology companies surveyed last year about real-time payments by the U.S. Faster Payments Council about 75% predicted U.S. financial institutions will be able to receive real-time payments by 2028, but they expect only about 35% will be able to send instant payments by that year. One reason for the lag cited by the respondents is concerns about fraud threats, the report noted. As the Fed races to sign up more banks and credit unions for its real-time payments network, The Clearing House has also seen an uptick in use as well. The RTP network's payment volume surged 38% in 2024 compared to the year prior. Recommended Reading FedNow draws 1,300 financial firms Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Finextra
10-06-2025
- Business
- Finextra
BofA clients embrace new $10 million limit in US real-time payments
Recent action from The Clearing House to increase the transaction limit on real-time payments from $1 million to $10 million is fueling new use cases in business-to-business payments among Bank of America clients. 0 The bank is one of the first financial institutions to enable its corporate customers to send payments up to the new transaction limit. As one of the owners of The Clearing House, Bank of America played a significant role in developing the RTP® network in consultation with peer banks, technology firms and the U.S. Federal Reserve. 'Our clients have been using RTP to pay vendors, employees and customers, but the larger cap has opened up use cases for different kinds of transactions, such as real estate and deal closings and other corporate activity,' said AJ McCray, head of Global Payments Products, Global Payments Solutions (GPS) at Bank of America. In the first six weeks since the transaction limit was raised, BofA corporate clients have increasingly taken advantage of the limit increase, with transactions over $1 million now accounting for more than half the value of all U.S. real-time payments the company is processing. 'The instant nature of real-time payments is a huge advantage for optimizing working capital and cashflow,' said Jay Davenport co-head of GPS Global Corporate Sales at Bank of America. 'RTP payments embody some of the most commonly requested features from our customers - convenience, transparency and resiliency.' Key features of the RTP network The network operates 24 hours, 7 days a week including holidays and weekends. Payments are settled immediately, regardless of time of day. The originator of a payment has transparency into the status of transaction, including whether it has been accepted or rejected. The recipient receives a payment within seconds. RTP uses ISO 20022, the international standard for financial messaging. This robust message standard offers multiple options for the originator to incorporate detailed remittance information with the payment. As real time payment adoption continues to rise, companies can explore new applications such as just-in-time supplier payments, complete real-estate transactions, and account to account money movement. Bank of America serves 94% of the Fortune 500 and 73% of the Global Fortune 500. Besides U.S. RTP network connectivity, these clients can take advantage of the full range of payment capabilities such as commercial card, ACH, wire and transactional FX solutions, in addition to the bank's own innovations, Recipient Select and Digital Disbursements.
