This is an excerpt from The Future of US Digital Payments 2025: ACH & Beyond.
What RTP and FedNow have achieved mark significant inflection points in US payments infrastructure.
By engineering instant movement of money, they have allowed a new range of financial products, embedded experiences, and business models to emerge.
As adoption of faster payments increases, interoperability, messaging standards, risk mitigation, and developer tooling must be updated.
ISO 20022 will be the catalyst for data-rich transactions
For several years, a key discussion point for the payments industry has been ISO 20022.
ISO 20022 is foundational to faster payments, namely because the standard enables structured, data-rich transactions.
By mandating adoption, financial institutions across the world can attach remittance information, invoice references, and payer or payee data to each payment, because of
ISO 20022.
Reed Luhtanen, executive director of the US Faster Payments Council, commented on the standard, stating that “‘information is king’.
He added: “Rich information that can flow with a payment will be a game changer for payments, especially faster payments.”
ISO 20022 will pave the way for interoperability
After the ISO 20022 deadline in November 2025, faster payments rails will be smoother with
straight-through-processing (STP), streamlined reporting and compliance, and potential for enhanced interoperability.
In Luhtanen’s view, these “benefits will provide the surety and certainty of faster payments that the industry seeks and needs.”
Renata Caine, general manager, senior vice president, embedded finance, Green Dot, has a similar view and mentioned interoperability when speaking to Finextra.
She made clear that as “new payment rails continue emerging, achieving mass adoption will require interoperability, open banking and open APIs, and investment in emerging technologies to combat fraud as the ecosystem grows and evolves.
“Consumers and business owners want speed and convenience in their experience with financial services but at the same time are not willing to compromise security and peace of mind.”
Request for Payment will need to be leveraged to keep pace with evolution
The future of US digital payments must include automated reconciliation, STP, and arguably most importantly,
request for payment (RfP) if firms want to remain competitive.
The RfP message type could turn real-time payments into bi-directional, eventdriven workflows that are useful for
just-in-time billing for utilities for instance, or consumer initiated B2B payments through a QR code, for example.
In conversation with Finextra, a representative from U.S. Bank indicated that RfP “has the promise to drive increased instant payment adoption in the US.”
Returning to the point around data, they elucidated on how RfP allows businesses to send data-rich digital requests through the receiver’s bank. This initiates an immediate payment, at any time of day, any day.
U.S. Bank’s view is that “RfP improves customer experiences by enhancing payer security through bank-driven authentication, and reduces risk for RfP senders by eliminating returns for unauthorised or insufficient funds compared to traditional debits.”
Intelligent routing is a necessity for standardisation across US payments
In the future, API-based platforms and cloud-based services, if not already, must also be leveraged to access both RTP and FedNow.
This ensures real-time transaction initiation and confirmation, pre-validation of payment data, and real-time
payment orchestration, which in turn, allows financial applications to be embedded directly into digital platforms.
Increased access to both RTP and FedNow will only have positive outcomes, particularly as both rails are expanding their bank network, cutting down on settlement friction.
Another benefit of standardisation is that fintech firms and smaller financial institutions will be able to access real-time payments via larger partner banks.
Shared infrastructure layers will promote standardisation across the faster payment rails, also cutting down time to market for multi-rail support.
Interoperability is a capability that is in dire need of being remedied; fragmentation between two networks will not lead to a cohesive national faster payments ecosystem.
Intelligent routing is essential. In 2025 and beyond, real-time payments systems must be integrated into multi-rail decision engines that will choose between RTP, FedNow, ACH, card or wire, depending on the value, urgency and liquidity constraints. Payment
intent logic and fraud detection models will also play a determining factor.
What does the industry think of the future of faster payments?
Taira Hall, head of payments at Citizens mentioned to Finextra that the market has been generally open to the capabilities that support the adoption of faster payments.
She shared that the “continued growth of APIs, the transition to cloud native platforms, and tokenisation are all actions in motion across the payments landscape that will continue to ramp up with greater instant payment adoption.”
Hall agreed that with increased volumes of faster payments, what will also be required is “real-time fraud detection, instant confirmations, 24/7 support, and enhanced dispute resolution.”