Welcome to the July 2025 Innovating Payments Executive Summary. This month marks two years since the launch of the FedNow Service, which continues to play an increasing role in the payments landscape. To support this growth, the Federal Reserve Financial Services introduced a new account activity threshold feature, allowing financial institutions to better manage risk by setting limits based on customer segments. The update also increases the transaction limit from $500,000 to $1 million to accommodate higher-value, business-related transactions.
At the policy level, Nacha and other industry groups have voiced strong support for Executive Order 14247, “Modernizing Payments to and from America’s Bank Accounts,” which seeks to reduce reliance on paper checks. Additional endorsements from The Clearing House, the Bank Policy Institute, and the Consumer Bankers Association underscore the need for a swift and secure transition as the Treasury modernizes disbursement methods.
Meanwhile, The Clearing House and Comerica have expanded RTP use cases to include “On Behalf Of” (OBO) payments—transactions initiated by one party on behalf of another. New rules establish a standardized framework to ensure transparency, due diligence, risk management, and fraud reporting.
On the member services front, NEACH has upgraded its database to enhance the user experience. As part of this update, members will need to reset their passwords to access content. Read on to learn more.
Top Payments Headlines
FedNow Service Two-Year Update
July 2025 marks the second anniversary of the FedNow Service's launch. In a special update featured on the FedNow Explorer website, Chief FedNow Executive Nick Stanescu shared his thoughts on the current status of the network and offered a glimpse into what we might expect in the future.
“We currently have more than 1,400 participants, up from 900 banks and credit unions at our one-year anniversary, and the network keeps growing every day,” Stanescu said in the update. “Along with adoption, we’re seeing volume continue to rise, and the number of senders—ranging from the biggest banks to the smallest credit unions—steadily climb.”
As more institutions adopt FedNow, the range of use cases is growing. Stanescu highlights applications such as instant payroll, auto loan disbursements, and digital wallet funding that have gained popularity. In addition, new uses are emerging across various industries, including real estate transactions, brokerage account funding, insurance payments, and more, indicating wider adoption across multiple sectors.
Complementing these developments is a growing interest in the request-for-payment (RFP) capability, a feature that allows a person or business to send an immediate payment request to another. Stanescu says he also expects financial institutions to offer instant bill pay services to help customers easily send e-invoices and receive quick bill payments, improving cash flow management in the future.
To learn more about the current status of FedNow and what we might expect in the future, click here.
And for more information on how to leverage FedNow, check out our Instant Payments Essentials Bundle.
FedNow Launches News Risk Mitigation Features and $1 Million Transaction Limit
According to a June 24, 2025, news release, the Federal Reserve Financial Services launched a new account activity threshold feature for the FedNow Service, allowing financial institutions to improve risk mitigation by setting dollar value and transaction velocity limits based on customer segments. The new feature comes with a transaction limit increase from $500,000 to $1 million to support higher-value activities, including business transactions.
“These new value-added features offer FedNow participants more options to customize their instant payments profile, adding to the suite of available tools that allow financial institutions to tailor activity according to risk management needs and customer activity,” said Mark Gould, Chief Payments Executive for Federal Reserve Financial Services in the release. “Feedback from the industry has been invaluable, and we intend to remain agile and responsive to new and changing customer needs as instant payments grow and mature.”
Community banks and credit unions make up over 95% of total participants. As the network grows, Federal Reserve Financial Services continues to explore new features in collaboration with the industry.
Nacha
Nacha submitted formal comments supporting Executive Order 14247, “Modernizing Payments to and from America’s Bank Account,” praising the Treasury Department’s efforts to eliminate paper checks for federal disbursements and collections, according to a company news release. The executive order, which mandates a complete shift to electronic payments by September 30, 2025, for federal disbursements, aligns with Nacha's longstanding goals to improve efficiency, security, and inclusion in the payments system.
“The federal government has long been a leader in adopting electronic payments, and fully transitioning away from paper checks is a significant step that will benefit American consumers and businesses while saving the federal government money,” Jane Larimer, President and CEO of Nacha, said in the release.
Other Nacha recommendations included:
- Expanding account validation to mitigate fraud and reduce improper payments.
- Utilizing existing banking information across federal agencies to streamline Direct Deposit enrollment.
- Reducing the Treasury’s ACH credit settlement times, bringing it in line with standard ACH timing in the private sector.
Nacha’s full comments are available here.
The Clearing House
Bank Groups Call for Swift, Secure Transition as Treasury Phases Out Paper Checks
The Bank Policy Institute, The Clearing House Association, and the Consumer Bankers Association submitted joint comments to the U.S. Department of the Treasury, urging prompt action to fully transition to secure, modern electronic payment methods and minimize the use of checks, a joint news release stated. The letter, submitted in response to a Treasury request for information relating to the Executive Order on Modernizing Payments, emphasized the importance of eliminating paper checks from government disbursements to reduce risk and ensure that all recipients benefit from faster, more reliable payment delivery.
“Removing paper Treasury checks from circulation is an important step toward reducing theft and the related losses to the federal government and financial institutions,” the groups wrote. “Treasury's efforts to phase out paper checks in government payments represent a critical opportunity to modernize America's payment infrastructure, reduce fraud, and increase financial security for American taxpayers.”
In the letter, the group also recommended that Treasury:
- Launch a public awareness campaign to educate consumers on the speed, simplicity, and security of electronic payments.
- Expand the government’s use of existing secure electronic payment platforms, such as The Clearing House’s ACH service (the EPN® network) and Early Warning Service’s Disbursements with Zelle®, and other modern secure and user-friendly payment solutions.
- Invest in fraud detection and prevention tools, such as identity verification capabilities.
- Limit exceptions to electronic payments and continue to work with financial institutions to detect counterfeit or altered checks.
- Study government payment data to better understand why some consumers still depend on paper checks.
You can read the full letter from The Clearing House Association, the Bank Policy Institute, and the Consumer Bankers Association here.
The Clearing House and Comerica Expand RTP Use Cases to ‘On Behalf Of’ Use Cases
Comerica Bank has become an early adopter of The Clearing House's revised rules for domestic On-Behalf-Of (OBO) payments on the RTP network, according to a company news release. Comerica Bank and its client, Monex USA, a provider of international payments, corporate FX, and currency risk hedging services, participated in one of the first OBO payments under the revised rules.
OBO payments are RTP transactions initiated by a sender to make a payment on behalf of another person. The sender owns the account from which the RTP payment is sent. The new rules replace existing requirements for Payment Service Providers and apply more broadly to intermediated RTP activity, establishing a consistent framework focused on payment transparency, due diligence, risk management, and fraud reporting obligations.
"Introducing this new capability is a testament to Comerica's commitment to providing our customers seamless, on-demand access to funds, both for themselves and their own customers," said Allysun Fleming, Comerica Bank Executive Director of Payments, in the release. "RTP OBO payments unlock real-time disbursement use cases at scale, such as payroll and benefits, marketplace payouts, embedded payments, and more. We are excited to participate in an ecosystem that enforces transparency of funds."
NEACH
NEACH has recently upgraded its database to offer an enhanced member experience. As a result, you will need to update your password to access member content.
Here’s what’s new and familiar on the refreshed website:
You can still find us at www.neach.org.
- The Members Corner Community remains unchanged.
- Our Online Learning Platform (LMS) is still active.
- Your progress in both the Community and LMS has been saved—no need to start over.
- How to log in for the first time and change your password.
- Buying events and publications:
- How to use the new Events page with improved search and filtering.
- Where to find and order from the new Publications page.
For more on what’s new and how to use the member portal, click here.
NEACH - New England Automated Clearing House Association is a neutral, member-focused advocate. Our role is to give you the intelligence, context, and connections you need to make informed strategic decisions. We bring together industry leaders, policymakers, and innovators so you can evaluate innovation through the lens of your institution’s mission and market strategy. For more information, visit neach.org.
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AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.
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