Dive Brief:
- The Clearing House (TCH) is quadrupling — to $100,000 — the limit for a single real-time payment, effective Feb. 1.
- The increase aims to make TCH’s network more attractive to financial institutions and users when compared with the Automated Clearing House’s same-day payment service, which has a $25,000 single transaction limit and the Federal Reserve’s FedNow, slated to roll out by 2024.
- Customers may perceive an increased risk along with the higher limit. Real-time payments — even errant or fraudulent ones — usually can’t be clawed back once they’re processed.
Dive Insight:
The new rule will require depository institutions on TCH’s network to accept real-time payments of up to $100,000. But individual banks will be allowed to set lower ceilings for transactions they originate.
"Increasing the transaction value limit to $100,000 is the next logical step for the growing RTP network," Steve Ledford, senior vice president of product strategy at TCH, said in a press release. "Businesses and consumers often want to send higher value payments and the $100,000 limit helps to address their needs."
More than half of the country's demand deposit accounts have access to TCH’s real-time payment network, which launched in 2017. That covers 18 of the top 25 U.S. banks, according to American Banker.
But concern over smaller community banks’ access to TCH’s network was among the factors the Fed gave in August for pursuing its FedNow service. The central bank added that a nationwide system operated by one player leaves the financial system open to risk.
FedNow detractors have argued that a multi-network system will stall the progress of real-time payments in the U.S.
Like the ACH system, FedNow would have a proposed single-transaction limit of $25,000, the Fed said in August.
