I set out to write the introduction to the July BAI Executive Report: Keeping pace with the payments evolution, knowing that the payments space across financial services, retail and elsewhere is evolving with enough speed there’s a real chance of missing the latest changes in payments policy or innovation just underway. Our title captures that sentiment. But let’s not be daunted. Let’s start this conversation and keep it going.
Certainly, the next frontier in digital assets shifts regularly with developments in Washington and in the private sector. After our July report published, President Trump signed the GENIUS Act, the first major crypto legislation ever passed by Congress.
While the GENIUS Act brings some regulatory clarity, and is a starting point for U.S. financial institutions, much remains to be seen. “Global coordination, consumer protection and broader crypto regulation are still needed,” members within the World Economic Forum wrote in a recent article summing up U.S. and other global market changes in this arena.
Speaking of timing, we’re only a few weeks separated from the FedNow payments rail’s raised transaction limit from $500,000 to $1 million, which means the U.S. payments landscape is entering a pivotal new phase—arguably one where real-time, high-value B2B payments are not only feasible, but increasingly expected at scale. The FedNow Service is marking its second anniversary with approximately 1,400 banks and credit unions on the network across all 50 states. Community banks and credit unions make up more than 95% of total participants.
Of course, the FedNow bump up follows The Clearing House’s earlier decision to raise its RTP network cap from $1 million to $10 million, already spurring adoption among larger banks and enterprise clients.
Change is underway for liquidity management, corporate treasury, vendor payments and other customer needs across industries as a result, and banking has new opportunities to respond.
The ultimate takeaway? This is a maturing real-time transaction market. As payment rails innovate, so too must their compliance, fraud and risk-mitigation features. And when that happens, fresh demand surely follows.
“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 a release with the raised limit. Feedback from the industry has been invaluable, he added.
Does our industry believe that security and user confidence isn’t top of mind? As the network expands, Federal Reserve Financial Services continues to explore additional features in consultation with the industry. For additional information on risk mitigation features of the FedNow Service, the agency urges a visit to the Fraud Control Tower.
Meanwhile, I had the pleasure of talking with The Clearing House’s Scott Miller earlier this year about efforts to bring even more community banks onto its payments rail, a segment of the industry they value for stimulating local economies and providing financial services to consumers and small businesses across America. Scott told me that as “payment innovation accelerates, bank customers expect their financial institutions — large or small — to provide the same type of digital experience they receive from online commerce.”
And, he argues, “community banks and smaller financial institutions should implement instant payments so consumers can reap the benefits of account-to-account (A2A) transfers, automation, real-time transfer verification and payment reconciliation.”
We hope that you find valuable and shareable insight from our reported articles and partner contributions in our July BAI Executive Report, and we welcome your feedback.
Happy reading.
Rachel Koning Beals is Senior Editor with BAI.
