The Federal Reserve’s FedNow instant payment service crossed 1,400 participating financial institutions in early 2026, up from 900 at its one-year anniversary in July 2024. The network now covers approximately 40 percent of US demand deposit accounts, though the majority of participants remain receive-only, meaning they can accept instant payments but have not yet enabled the ability to send them.
In a significant capacity expansion, the Federal Reserve raised FedNow’s individual transaction limit to 1 million dollars, up from the previous 500,000-dollar cap. The increase opens the service to commercial payment use cases including business-to-business settlements, real estate transactions, and insurance disbursements that previously exceeded the network’s threshold.
New functionality deployed during the period includes account activity threshold tools that allow institutions to set customizable fraud protection parameters by customer segment and transaction velocity. Correspondent net send limits were also introduced, enabling banks that process payments on behalf of smaller respondent institutions to manage liquidity exposure within defined caps.
Emerging use cases gaining traction include instant payroll disbursement, auto loan funding, and digital wallet defunding. The Federal Reserve identified merchant refunds, account funding, healthcare payments, and small business payments as growth areas expected to accelerate over the next 12 to 18 months. A survey found 66 percent of businesses would use instant payments if their primary bank offered the capability.
