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Faster Payments: What Debit Issuers Need to Know

Author Svetla Pavlova

A person holds a payment card and a cellphone.

A growing number of financial institutions are offering or considering real-time payment services. Despite this apparent momentum, key questions linger:

  • How do the available options differ from one another?
  • How do they compare to the account-to-account (A2A) transfers offered by debit networks?
  • What should institutions consider as they navigate this rapidly evolving space?

Faster payment options

There are two real-time retail payment systems in the U.S.:

  • The RTP® platform, operated by The Clearing House (a consortium of about 20 large banks)
  • FedNow, operated by the Federal Reserve

These services were launched in 2017 and 2023, respectively.

Major debit networks such as PULSE offer similar capabilities via A2A transfer services that enable businesses and consumers to send and receive funds. To supplement these debit-based transfers, some institutions have joined RTP and/or FedNow to gain additional capabilities.

Understanding the similarities and differences between these options can help financial institutions determine whether and when to offer an additional service.

Network capabilities differ

Debit networks process an estimated 5 billion money-movement transactions in the U.S. every year, according to the 2025 PULSE® Debit Issuer Study. This total represents about 92% of all such activity. Combined, RTP and FedNow switch the remaining 8%, with RTP accounting for the vast majority (98%) of that volume, according to quarterly reporting from The Clearing House and the Federal Reserve.

The table below highlights key capabilities the real-time payment networks offer and compares those services with similar debit-network transactions.

Table details the differences between services offered by RTP and FedNow and shows how they compare to similar debit-network transactions.

Faster-payment use cases

RTP and FedNow have much higher average transaction sizes compared to debit-network A2A transactions. Aimed at business customers, the real-time networks provide the ability to make business-to-business (B2B) payments more cost effectively than wire transfers.

Yet, B2B payments are a small fraction of the total payments processed by RTP and FedNow. Instead, three use cases generate the majority of transactions:

  • A2A transfers, such as when consumers move money between accounts at different institutions (including brokerage accounts)
  • Digital-wallet defunding, such as when consumers move money from digital-wallet accounts to demand deposit accounts (DDAs) and choose an immediate transfer
  • Employee payouts, such as when gig-economy workers request payment at the end of a shift, or payroll employees request earned-wage access

In all these cases, the transactions could be – and often are - performed by a debit network. And, both the consumer and the financial institution may benefit if these transfers are routed over a debit network.

Debit-network A2A transfers are nearly as instantaneous as real-time payments, with networks typically requiring participants to credit users’ accounts within 30 minutes. In addition, all payments switched by a debit network are subject to the network’s dispute and chargeback policies, providing protection to both senders and receivers.

By contrast, RTP and FedNow operate like wire transfers, where payments are irrevocable. Settlement finality is an advantage in certain scenarios, such as purchasing a car, where an irrevocable real-time payment can replace a certified check. In many other instances, however, the ability to correct inappropriate charges is vital to consumer confidence.

In addition, financial institutions receive interchange on every debit-network A2A transaction. Conversely, FedNow does not provide any compensation to network participants, while RTP has an inter-bank “incentive fee” that applies on certain Request-for-Payment (RfP) transactions.

Looking Ahead

Given these differences, it is important for financial institutions to think about real-time-payment use cases separately, distinguishing B2B activity from business-to-consumer and consumer-to-consumer payments. If an institution is sending a growing portion of transactions to a network, it needs to understand whether those transactions are net new volume or cannibalized volume from other payment rails.

As adoption grows and encompasses more consumer payments, issuers should carefully manage their participation in real-time payment networks in alignment with their business strategy and clients’ needs. Doing so will help financial institutions avoid creating additional risk, reducing consumer protections, or negatively impacting interchange income.

To learn more about debit-based A2A payments, download the 2025 PULSE Debit Issuer Study or contact a PULSE debit expert.