Capital One Joins FedNow, Raising Pressure on Big Bank Holdouts

Capital One has officially joined the Federal Reserve’s FedNow real-time payments network, becoming one of the latest major U.S. financial institutions to adopt instant payment capabilities. The bank began participating on Tuesday, according to a spokesperson. The move places additional pressure on remaining holdouts—most notably Bank of America and Truist—which are now among the only large U.S. banks not yet connected to the Fed’s instant payments ecosystem.

“Financial institutions of all sizes are rapidly enabling instant payments for their accountholders,” said Reed Luhtanen, CEO of the U.S. Faster Payments Council. “The ability to offer instant money movement is becoming table stakes in our 21st-century economy, and financial institutions that don’t have a faster payments strategy need to develop one, and fast.” Bank of America did not immediately comment, though a spokesperson confirmed last month that the bank had not yet joined FedNow.

FedNow, launched in July 2023, now includes about 1,550 U.S. financial institutions, ranging from major banks to local credit unions—though thousands more have yet to enroll. Only U.S. financial institutions are eligible to participate, and the Federal Reserve continues efforts to onboard smaller regional and community banks.

The central bank is also working to make onboarding faster and more accessible. FedNow CEO Nick Stanescu noted in a recent video update that the current record for onboarding a bank—from contract signing to service activation—is just seven days. Additionally, 41 certified service providers are now supporting institutions in connecting to the network. To support broader use, the Fed has been increasing transaction limits. This month, the maximum allowable FedNow payment was raised from $1 million to $10 million, paving the way for higher-value, time-critical transfers.

Although thousands of institutions remain outside the network, large banks remain the dominant force in U.S. payments. The 50 largest banks account for more than 90% of all payment originations across major clearing systems operated by The Clearing House and Nacha.

Reference: BankingDive.