The demand for instant payments has never been greater in the United States. Financial institutions (FIs) increasingly see real-time payment capabilities as foundational, not optional, for modern infrastructure. However, fragmentation due to multiple existing payment rails—such as the RTP® network and the FedNow® Service—stands as a potential barrier to broader adoption. Can these rails coexist, or is interoperability—the ability of different payment systems to seamlessly connect and exchange payments—needed to unlock the full benefits of real-time payments?
Demand for Real-Time Payments Rises
Demand for real-time payments is growing, but the lack of interoperability among existing systems remains a barrier to further progress.
Most institutions now treat instant payments as essential infrastructure.
According to the 2025 U.S. Faster Payments Barometer, eight in 10 respondents now say faster payments—including real-time payments—are a “must-have” capability. Indeed, market sentiment toward faster payments’ progress is at an all-time high, with 61% of participants satisfied with the current pace of development in the U.S. That marks a major shift from 2019, when fewer than half—41%—expressed satisfaction with the industry’s progress.
80%
of recently surveyed market participants say faster payments are a “must-have.”
Moreover, Mastercard now projects that real-time payments’ transaction value will grow 289% from 2023 to 2030. This is expected to be driven largely by expansion from peer-to-peer (P2P) and consumer-to-business (C2B) payments to include business-to-business (B2B) and business-to-consumer (B2C) use cases.
However, fragmentation of networks leads to adoption roadblocks.
Still, as the aforementioned U.S. Faster Payments Barometer highlights, adoption challenges remain. The lack of ubiquity and interoperability among existing faster payment systems emerged as the leading implementation challenge cited by non-financial institution market participants, at about 59%. Meanwhile, roughly 37% of FIs consider this challenge relevant to their organizations, third in line after high upfront costs (about 58%) and inadequate readiness to manage risks in instant transfers (approximately 38%).
With the RTP network transmitting more than 96% of the overall instant payments volume in the U.S. while covering roughly 71% of deposit accounts (according to The Clearing House, which operates the RTP rail), and the FedNow Service reaching about 35% of bank accounts, FIs often connect to both networks to ensure long-term reach. This ultimately raises costs and complexity. Consumer apps like Venmo and PayPal further silo real-time access, making interoperability more elusive. As the Official Monetary and Financial Institutions Forum (OMFIF) reports, high costs and integration complexity continue to slow progress across the long tail of the market. Simpler, unified systems are critical to resolving fragmentation and accelerating adoption.
Fragmentation Hinders Adoption
The absence of standardized interfaces and protocols creates additional integration costs and delays market adoption of real-time rails.
Banks embrace dual rails to overcome challenges.
58%
of FIs offering instant payments leverage both the RTP network and FedNow Service, as interoperability gaps nudge banks toward costly dual-rail strategies.
To sidestep interoperability gaps, most FIs that offer instant payments—58%—now operate on both the RTP and FedNow rails. While this extends reach, it also compounds integration challenges, according to the 2025 U.S. Faster Payments Barometer. The dual-rail approach boosts network coverage and payment resilience—but adds cost and operational complexity. Businesses still face inconsistent capabilities across banking partners, while tech providers struggle to support competing formats and standards. Without streamlined interfaces, integration remains slow, fragmented and expensive.
Global data shows that interoperability drives digital payment adoption.
New research from the International Monetary Fund (IMF) finds that interoperable payment systems help boost retail digital payments by lowering adoption barriers. Using India’s Unified Payments Interface (UPI)—the world’s largest instant payments platform by volume—as a benchmark, the IMF links cross-platform flexibility with higher usage and broader financial inclusion. Its findings support growing calls for standardized real-time infrastructure in the U.S., where system fragmentation still limits seamless user access.
Market maturation has tempered some concerns, but solving for interoperability remains crucial.
Views on interoperability have evolved. Between 2021 and 2024, the share of firms calling interoperability “very important” dropped from 74% to 61%, while the share describing it as “somewhat important” rose from 22% to 33%, reflecting growing realism about costs and trade-offs.
However, as Mastercard notes, running multiple real-time rails increases liquidity fragmentation and capital strain—especially when banks lack real-time visibility into balances across systems. Banks often can’t build a complete picture of cash positions because data is scattered across siloed systems. As a result, many lack real-time visibility to manage balance sheet risk or allocate capital efficiently.
Multiple Rails and the Future of Real-Time Payments
Real-time payments’ success rests in large part on ensuring system interoperability and real-time data exchange.
Banks recognize the need for interoperability—but have been slow to act.
Interoperability remains more aspiration than reality. A 2025 report from RedCompass Labs finds that 92% of banks offering instant payments are considering interoperability between payment schemes, with 52% strongly considering it. Despite this interest, only 2% have put interoperability into practice. This sizable gap highlights deep technical and operational barriers. As Edenred Pay explains, interoperability reduces costs, improves fraud detection and widens access—but demands coordination, common protocols and shared infrastructure. Meanwhile, Mastercard argues that interoperability strengthens system resilience by allowing fallback between schemes. Most institutions are still figuring out how to make it happen.
92%
of U.S. banks offering instant payments are eyeing interoperability. Only 2% are making it happen.
PaaS platforms are emerging as practical interoperability enablers.
As noted in the 2025 U.S. Faster Payments Barometer, modern payments-as-a-service (PaaS) platforms are serving as practical workarounds to real-time rail interoperability challenges. By providing a single point of access to multiple payment networks, these systems mask the underlying complexity of connecting to different rails, allowing institutions to manage noninteroperable systems while keeping internal processes consistent. The result is less operational friction, lower costs and greater flexibility.
Standards and partnerships aim to support global payment interoperability.
The U.S. Faster Payments Council has endorsed ISO 20022 as key to achieving seamless cross-border payments. ISO 20022 enables structured data exchange and supports automation of compliance, fraud detection and reconciliation across networks. Richer ISO 20022 formatting ensures U.S. systems can communicate globally, with the Faster Payments Council urging Society for Worldwide Interbank Financial Telecommunication (SWIFT)-aligned transitions. The Council also recommends stronger interlinkages between U.S. domestic systems like the RTP network and FedNow Service and global networks. To support around-the-clock international interoperability, the Council highlights the value of partnerships with innovative FinTech firms such as Ripple and Stellar.
From Vision to Execution: The Future of U.S. Instant Payments
Interoperability may determine whether real-time payments fulfill their potential—or remain locked in silos. Today, most systems still operate in isolation, making it harder for FIs to scale, compete and control costs. Financial institutions, technology providers and policymakers must now coordinate efforts to bridge the gap between intent and execution—and build a unified, resilient real-time payment infrastructure.
To accelerate progress, PYMNTS Intelligence recommends the following strategies:
- Enable real-time liquidity visibility across systems to manage capital efficiently.
- Leverage PaaS platforms to simplify access to multiple rails and reduce integration complexity.
- Embed fraud detection and compliance into interoperable workflows to minimize risks and operational friction.
- Support ISO 20022 and SWIFT compatibility for global message alignment.
- Build contingency strategies so that systems can fall back on alternative rails when needed.
Fragmentation remains a drag on efficiency, access and innovation. As a result, work on interoperability should be accelerated. It may be the foundation for scaling real-time payments from patchwork adoption to the industry standard.
