The instant payments race is on, and Dwolla wants to be the orchestrator

Instant payments have shifted from buzzword to business reality. Consumers expect wages, insurance reimbursements, and refunds to appear in their accounts immediately. Companies want predictable cash flow, real-time settlement, and fewer back-office headaches. The rails are in place. The real battle is over who can make those rails accessible to enterprises at scale.

The Federal Reserve's FedNow service and The Clearing House's Real-Time Payments (RTP) network are expanding quickly. In the second quarter of 2025, FedNow handled more than 2.1 million transactions worth about $245 billion, up 62.7 percent from the prior quarter (Federal Reserve). RTP processed 107 million transactions in the same period with a value of nearly $500 billion, according to The Clearing House.

Adoption is accelerating, but the market remains fragmented. Many banks still only allow customers to receive instant payments rather than send them. Others have hesitated to connect altogether, citing fraud risks or costly upgrades. As of mid-2025, about 58 percent of U.S. financial institutions offering instant payments support both FedNow and RTP, reflecting a growing shift toward multi-rail strategies.

This uneven environment has opened the door for fintech platforms to play the role of orchestrator. Iowa-based Dwolla, known for its work in account-to-account transfers, is betting on that role.

A single integration for multiple rails

Dwolla's strategy is to provide enterprises with a single API that routes payments across FedNow and RTP. If one network is unavailable or unsupported, the payment automatically moves through the other. Businesses avoid the cost of multiple integrations and gain broader coverage.

The company also emphasizes visibility. Instant payments are not just about speed but about the data that accompanies them. Dwolla's system includes remittance information, real-time status updates, and lifecycle tracking, features that can reduce reconciliation errors and ease back-office operations.

The value proposition for enterprises

The appeal of instant payments extends well beyond faster settlement. For businesses, immediate supplier payments can unlock early payment discounts and reduce penalties. Finance teams can automate reconciliation, replacing manual processes that are slow and error-prone. Consumers and workers benefit from faster access to funds, whether from wages, insurance claims or marketplace payouts.

McKinsey estimates that companies digitizing payments can increase profitability by up to seven percent. According to Dwolla's published case studies, a pet insurance company improved reimbursement efficiencies by more than 800 percent after integrating the platform. A tipping company increased transaction volume by 86 percent after enabling same-day ACH, and a real estate platform processed $700 million in earnest money deposits without fraud incidents.

Risks and realities

Fraud remains a central concern as instant payments adoption accelerates. The speed of settlement compresses the window for detecting suspicious activity, raising the stakes for enterprises and financial institutions alike. Recent surveys show a rise in scams tied to real-time payments, with nearly half of consumers reporting they had been targeted by fraudsters exploiting faster rails.

Transaction limits also vary across networks. The Real-Time Payments system, which for years capped transactions at $1 million, raised its limit to $10 million in early 2025 (PaymentsDive). FedNow, which originally capped transfers at $500,000, has announced plans to match RTP's $10 million ceiling.

Despite this growth, coverage remains incomplete. While adoption is broadening, not all banks are yet able to send and receive instant payments on both networks, leaving gaps in accessibility for enterprises that want nationwide reach. Analysts note that to scale responsibly, financial institutions will need to invest in advanced fraud analytics and layered defenses in parallel with adoption.

For platforms like Dwolla, which sits at the orchestration layer, these risks are not ignored. The company requires approval processes before enabling instant payments and embeds eligibility checks and transaction status reporting directly into its API. That provides businesses with additional visibility and control, though the broader responsibility for fraud prevention continues to rest with enterprises and their financial partners.

A first-mover advantage

The race is still early, but the stakes are high. Once enterprises integrate instant payment flows into payroll, accounts payable, and customer disbursements, switching becomes difficult. Platforms that establish themselves as orchestration layers now could become embedded infrastructure in the financial system.

Instant payments already account for 16 percent of global transactions and are projected to reach 22 percent within a few years. In the U.S., where adoption lags behind other markets, the next wave of growth may come from enterprises seeking to differentiate with speed and reliability.

Dwolla's wager is that orchestration, transparency and developer-friendly design will win over those enterprises. The company's timing may be advantageous. With both FedNow and RTP scaling quickly, demand for a unified layer is only increasing.