December 2, 2025
Until fairly recently, “instant payments” felt like a future problem; something Wall Street was facing but fintech could solve for credit unions. That changed when FedNow® launched in mid-2023, joining The Clearing House’s private RTP® network, and forming a nationwide infrastructure for instant money movement.
For the first time, every U.S. depository institution had access to a public rail, settling transactions at lightspeed, 24 hours a day, seven days a week. In less than three years, what was novel is now the norm, and 2026 may be the year credit unions start feeling it.
Universal Adoption Signals Exponential Growth
More than $480 billion went through RTP in the second quarter of 2025—a staggering 195% increase on just the previous three months. While the hockey stick trajectory is broadly linked to the network increasing its transfer cap to $10M in February, even if Q3 levels returned to some semblance of normalcy—based on 2024’s quarterly growth—reaching $960B and over $1.3T in the final two quarters of the year wouldn’t be out of the question (Fig. 1).
If, however, the trajectory continues … Could we see the network’s dollar volume reach $2T+ by 2026? Maybe.
Regardless, volume coming close to either of those numbers signals broad corporate adoption, not just peer-to-peer.
Meanwhile, FedNow’s participant list surpassed 1,400 financial institutions in October, many of them natural-person credit unions or their corporate counterparts. They also announced plans to increase their transaction cap to $10M in November (although the move hasn’t materialized at the time of writing) so should expect to see similar growth to RTP.
It’s clear credit unions will have to navigate the reality of instant payments in 2026. Where once, liquidity could rest, outflows were predictable and treasury teams had time to rebalance, sweep, or borrow before the next morning; now there is no buffer.
No float, no batch windows, no “We’ll settle that on Monday.” The money moves when the member moves it, and it doesn’t come back.
A Double-Edged Sword
Instant payments also require new disciplines, rigors that come with risk on all sides. Every outgoing transfer must be backed by pre-funded cash. If the settlement account runs short, the payment fails and credit unions are faced with (understandably) angry members. Overfund it, however, and idle cash earns nothing. And regardless, the float that once earned a few basis points is gone. Instant payments puts the “balance” into “balance sheet”.
There is help available, of course. FedNow’s Liquidity Management Transfer tool, for example, can automate funding between accounts, but it only works when a credit union has built the rules, limits, and alerts ahead of time. For most credit unions, that’s a muscle that hasn’t been fully developed yet.
With New Tech Comes New Risk
Real-time settlement also rewrites the risk rules. Instant payments are final; no window to recall something issued in error or triggered by fraud.
Credit unions would do well to learn from lessons across the pond. The UK introduced real-time payments as early as 2008 … and fraud skyrocketed. So-called “authorized push payment” (APP) scams were so prevalent, legislation was introduced to better protect consumers. And, as with so much financial services legislation, the cost of implementation fell on the FIs.
UK regulators mandated reimbursement for most in-scope APP fraud and rolled out Confirmation of Payee processes to be integrated into online banking and mobile apps.
A more robust CFPB could be expected to propose similar legislation on this side of the Atlantic. That may not be the case under the current administration, but credit unions should certainly expect some level of increased scrutiny in the near future.
Getting Ahead in 2026
All of this is not to say instant payments are a losing proposition, but they do require a reinvigorated approach to balance sheet management.
Instant payments should be treated as a balance-sheet event, not just a feature. Credit unions should document how much liquidity they hold, where it sits, and how it’s replenished with a role or individual explicitly accountable for monitoring it, even on weekends and holidays.
Another consideration for credit unions is to connect their payments strategy to their ALM process, tying liquidity and loan growth to the timing of cash, not just the amount.
Finally, credit unions have to ensure their members are educated—that they know “instant” also means “final”. Prevention is the first line of defense against modern fraud.
Any innovation has its growing pains, but the same rails that challenge balance sheets today also offer a phenomenal longer-term member experience. Getting to grips with the opportunity requires a new approach to liquidity management, and LendKey is here to help.