While regional banks represent only a small fraction of FedNow participants today, there is still significant runway to use real-time payments as a foundation for commercial banking growth.
FedNow just reached its third anniversary, and the adoption story reveals an important opportunity. More than 1,800 financial institutions are now live on the network—but participation remains concentrated among smaller institutions. According to the Kansas City Fed’s latest Community Banking Bulletin, more than 96% of participants are community banks and credit unions with less than $10 billion in assets.
Source: kansascityfed.org
Our analysis of the Fed’s participant list tells a similar story: regional and super-regional banks represent a smaller share of live participants today, with roughly six out of ten of the country’s largest regional banks yet to go live.
Two very different starting points
Community banks and credit unions have led on participation, and it’s a genuine accomplishment given the resources involved: thinner budgets, smaller teams, and a lot riding on every customer relationship. What’s worked in their favor is speed to decision — simpler cores, shorter approval chains, and clear urgency around not losing a small-business customer to a fintech offering instant payouts.
Regional and super-regional banks are working from a different set of realities. Cores shaped by years of M&A, risk and AML processes that have to hold up at much higher transaction volume, and modernization roadmaps that already run deep. None of that reflects a lack of ambition – it reflects the complexity that comes with scale. It also means the opportunity ahead is still wide open for institutions that move deliberately.
Instant payments go commercial – and regional banks can lead
Instant payments started as a consumer story, but that’s changed. A joint survey from the Faster Payments Council and Finzly found corporate customers now drive close to 78% of instant payments revenue. In a related Finzly/American Banker panel, half of bank executives said the biggest FedNow profit opportunity is fees on business send-and-receive activity, not free consumer transfers. Another 29% pointed to embedding instant payments into the ERP and treasury tools their commercial clients already use.
That’s supplier payments, payroll, cash concentration, inventory financing – exactly the relationships regional banks have spent decades building. It’s also the customer base most willing to pay for speed. The highest-value use cases sit inside commercial relationships that regional and super-regional banks are especially well positioned to serve.
The number that matters more than “who’s live”
Here’s the stat that deserves as much attention as the participation numbers: over 60% of financial institutions say they have readiness gaps specifically on sending instant payments, not just receiving them. Receive-only doesn’t support a payroll run or a supplier payment — the use cases where the commercial revenue lives. Being live and being commercially ready are two different milestones, and the second one is where the opportunity really gets decided, for institutions of every size.
This split shows up within the community bank and credit union numbers too. Some forward-thinking institutions have gone all in – building out send capability and layering on request-for-payment and other advanced services to get ahead of the commercial opportunity. Others are live in name but working within core constraints that limit them to receive-only for now. Participation counts treat both the same way, but they’re at very different points on the readiness curve.
Looking ahead
Adoption among eligible smaller institutions is still below 21%, signaling that the market is much earlier than the headline participation numbers suggest. For regional and super-regional banks, that creates a window to build the right foundation—one designed for commercial scale, not just connectivity.
The opportunity is not simply to join FedNow. It is to use instant payments as a platform for growth: enabling real-time treasury, faster receivables, supplier payments, Request for Payment, and new commercial experiences before instant payments become a baseline expectation.
FedNow’s first three years were defined by early participation. The next chapter will be defined by how banks turn instant payments into business value. Regional banks that invest in send-side readiness today will be positioned to lead tomorrow’s commercial payments market.
Ready to explore what instant payments can unlock for your commercial clients?
Sources: Federal Reserve Bank of Kansas City, Community Banking Bulletin (July 2026); Federal Reserve FedNow Service Participating Financial Institutions list (July 20, 2026); Faster Payments Council / Finzly corporate instant payments survey; Finzly/American Banker executive panel.
