Real-Time Payments Explained: FedNow, SEPA Instant and What Changed in 2025-26

Real-time payments have moved from a niche fintech talking point to production-level infrastructure that finance teams now have to actively plan around, not just read about. In the US, the Federal Reserve's FedNow service has scaled past early-adopter numbers into genuine institutional use. In the EU, the Instant Payments Regulation has turned "instant" from an optional feature into a legal requirement. Both developments change how finance and treasury teams should think about cash management, fraud controls, and payment costs.

What "real-time payments" actually means

A real-time (or instant) payment clears and settles within seconds, 24 hours a day, 365 days a year, rather than moving through the batch-processing windows of traditional payment rails like ACH or SEPA credit transfers, which can take a business day or more and typically don't run outside banking hours. The practical effect is that money becomes available to the recipient almost immediately, which changes assumptions that have been baked into cash forecasting and treasury processes for decades.

FedNow: from pilot to production-level usage

FedNow launched in 2023 with modest volumes, around 47,000 payments in its first partial year. Growth since then has been dramatic: volume reached roughly 1.5 million payments in 2024 and 8.4 million in 2025, a 459% year-over-year increase, with a cumulative transaction value of $853 billion across 2025. In the first quarter of 2026 alone, FedNow processed approximately 2.73 million payments totalling $271 billion, with quarter-over-quarter growth of 10.6% in volume and 7.7% in value. Participation has grown alongside usage, surpassing 1,700 financial institutions as of May 2026, ranging from community banks and credit unions under $500 million in assets up to institutions with over $3 trillion. Notably, the average FedNow payment size is around $99,000, which points to the current growth being driven primarily by institutional and business use rather than small consumer peer-to-peer transfers.

SEPA Instant and the EU's Instant Payments Regulation: no longer optional

The EU has taken a more directive route than the US, making instant payments mandatory rather than leaving adoption to market forces. Under the Instant Payments Regulation, euro-area payment service providers were required to be able to receive instant credit transfers from 9 January 2025, and to be able to send them from 9 October 2025; non-euro-area providers and non-bank providers have later deadlines running through mid-2027. The regulation also requires fee parity, meaning a bank cannot charge more for an instant transfer than it charges for a standard credit transfer, removing the pricing lever that had slowed voluntary adoption in some markets. A further requirement, Verification of Payee, obliges providers to check that the account name and account identifier actually match before a payment is confirmed, a fraud-prevention measure built directly into the regulation rather than left to individual banks' discretion.

Why this matters beyond the payments team

For finance and treasury professionals, real-time payment rails change several long-standing assumptions at once. Cash forecasting models built around batch-settlement timing need revisiting when incoming and outgoing funds can move in seconds rather than a business day. Fraud and authorisation controls need to be tighter upfront, since instant settlement leaves little to no window to catch and reverse an erroneous or fraudulent payment after the fact, which is part of why the EU built Verification of Payee directly into its regulation rather than treating it as optional best practice. There are also implications for liquidity management and intraday cash positioning, both of which are discussed in more depth in our guide to treasury management systems, since the TMS layer is typically where real-time payment rails actually get integrated into a company's day-to-day cash operations.

How this connects to the broader payments and open banking landscape

Real-time payment rails don't exist in isolation from the other structural shifts reshaping European and global payments. Our guide to PSD3 and Open Banking covers the related regulatory push toward account-to-account payment initiation, which is increasingly being built on top of the same instant-settlement infrastructure described here. Together, these changes are steadily eroding the advantages that card-based payment rails have traditionally held on cost and control, particularly for business-to-business payments where same-day cash visibility has real treasury value. For finance teams building or refreshing cash flow forecasts in this environment, our guide to using AI for cash flow forecasting looks at how forecasting approaches are adapting to payment timing that is far less predictable in batches and far more continuous in practice.

FAQ

Is FedNow the same as SEPA Instant? No. FedNow is the US Federal Reserve's domestic instant payment rail; SEPA Instant Credit Transfer is the equivalent euro-area scheme, now underpinned by the EU's Instant Payments Regulation, which makes participation and fee parity mandatory in a way FedNow adoption in the US currently is not.

Do banks have to offer instant payments? In the EU, yes, for euro-area payment service providers, on a staggered timeline running from January 2025 through mid-2027 depending on provider type. In the US, FedNow participation remains voluntary, though adoption has grown rapidly.

Can instant payments cost more than regular transfers? Under the EU's Instant Payments Regulation, no; providers must charge no more for an instant transfer than for an equivalent standard credit transfer. No equivalent fee-parity rule currently applies to FedNow in the US.

The shift to real-time payment rails is no longer a future consideration for finance and treasury teams; with EU adoption now legally mandated and FedNow volumes compounding quarter over quarter, it's operational infrastructure that cash forecasting, fraud controls, and treasury systems all need to be built around today.

Faster settlement rails aren't the only checkout-side change reshaping consumer payments. Our guide to BNPL regulation and the FCA's new rules covers how Buy Now, Pay Later is moving into full UK consumer credit regulation from July 2026.

The infrastructure behind faster payments also underpins how Banking as a Service providers move money for the brands they serve, and how embedded finance products settle funds quickly enough to feel instant inside a non-financial app.