An instant payment is a transaction in which money moves from one bank account to another almost immediately, typically within seconds or minutes. These payments use real-time payment networks, such as Real-Time Payments (RTP) in the US and Faster Payments in the United Kingdom. Unlike many traditional transfers that can take hours or days and are only available on weekdays, instant payments are processed 24/7, including on weekends and holidays.

While only a minority of US financial institutions received instant payments in 2024, adoption is expected to jump to 70%–80% of institutions by 2028. Below, we explain how instant payments work, what challenges to look out for, and how businesses can implement these payouts for their customers.

What’s in this article?

• How are instant payments processed?
  
• What can instant payments do for your business?
  
• What are the challenges of working with instant payments?
  
• How can businesses set up instant payments for their customers?
  

How are instant payments processed?

Instant payments work through real-time payment networks that clear and settle transactions within seconds. Here’s how it typically happens:

• Initiation: The sender (i.e., a person or business) authorizes a payment through their bank or a payment service provider.

• Verification: The bank checks for sufficient funds and validates the transaction details.

• Real-time processing: The payment request is sent through a real-time payment network, such as RTP or Faster Payments.

• Settlement: The recipient’s bank instantly receives the funds and updates the recipient’s account balance.

• Confirmation: Both the sender and recipient get immediate confirmation that the payment went through.

What can instant payments do for your business?

Instant payments change the way businesses handle money. They impact everything from cash flow to customer expectations. Here’s how:

• Cash flow happens in real time: Instead of waiting days for payments to clear, businesses receive their money instantly. That means fewer cash flow gaps, faster vendor payments, and less reliance on credit to cover short-term expenses. This can make a huge difference for companies running on tight margins or processing a high volume of transactions.

• Payments are more predictable: With many traditional bank transfers, businesses have to plan around batch processing and settlement delays. Instant payments eliminate that uncertainty, which makes it easier to manage revenue and forecast cash flow without building in buffers for delays.

• There’s less hassle chasing payments: Businesses that rely on invoices or scheduled payments no longer have to deal with bank cutoff times or long processing windows. This is especially useful for B2B transactions or industries such as gig work.

• Risk and fraud look different: Since instant payments are final, businesses don’t have to worry about reversing transactions. However, that also means fraud prevention must take place before the payment goes through.

• Customers expect everything more quickly: When people get used to real-time refunds and immediate bill payments, slow processing feels outdated. Businesses that offer instant payouts—whether it’s a marketplace, financial service, or gig platform—stand out from the competition.

What are the challenges of working with instant payments?

Instant payments solve a lot of problems, but they come with trade-offs. The same speed and finality that make them efficient also introduce some risks businesses need to anticipate. For some transactions—such as large international payments or high-risk transfers—slower, more traditional options might still be the best choice.

Here’s what you should consider when you start to work with instant payments:

• All payments are final: Once a payment goes through, it’s done. Unlike with credit cards or some Automated Clearing House (ACH) transfers, there’s no easy way to reverse a mistake. If money is sent to the wrong place, it can be difficult to recover.

• There’s less time to fix errors: Traditional payments have built-in delays that give finance teams a chance to catch mistakes or potential fraud before money moves. With instant payments, that buffer disappears. Businesses might need to rethink approval processes or put tighter controls in place.

• Payments are subject to technical issues: Even instant payments can run into problems. Banks and payment networks can have outages; transactions can get flagged for review; and delays—while rare—still happen.

• Not every bank works with these networks: While adoption is growing, not all banks support instant payments. If a customer’s bank isn’t connected to the network, they won’t be able to send or receive instant payments.

• Payments might come with transaction limits: Many instant payment networks cap how much money can be sent at once. If a business needs to move large amounts for payroll or a big supplier payment, traditional transfers might still be the only option.

• Cross-border payments might not be possible: Most instant payment systems work only within a single country or region. International transfers still rely on older, slower systems.

• Costs can add up: Instant payments are generally cheaper than card processing, but some businesses might need to upgrade their payment systems to use them. Businesses need to weigh whether the benefits are worth the up-front cost.

How can businesses set up instant payments for their customers?

Businesses can set up instant payments for their customers by integrating with payment providers such as Stripe, which supports real-time bank transfers. Stripe also helps reduce fraud by verifying bank account ownership and using risk-scoring models to catch suspicious transactions before they process.

Businesses can take the following steps to get started:

• Set up Stripe Connect or Stripe Payments: Businesses can enable instant payments through their Stripe Dashboard with minimal development work.

• Use Stripe’s application programming interfaces (APIs) for custom integrations: If a business wants to deeply embed instant payments into its platform, it can use Stripe’s APIs that securely handle real-time bank transfers.

• Monitor transactions in the Stripe Dashboard: Businesses get full visibility into bank payments, with real-time tracking and automated reconciliation.

To accept instant payments from customers, businesses can offer various payment solutions. For example, UK-based businesses can allow customers to pay instantly via Pay by Bank, and businesses across many regions can offer instant payments via iDEAL, Swish, and more.

US-based businesses can use Link—Stripe’s accelerated checkout experience—which allows customers to send funds directly from their US bank accounts with near-instant settlement via Instant Bank Payments.

Businesses that need to send money to customers or vendors quickly—such as gig platforms, marketplaces, or ecommerce sellers—can use Instant Payouts for Stripe Connect to transfer funds directly to bank accounts, which typically settle within 30 minutes.