DJ Seeterlin, Chief Innovation Strategy Officer for Chesapeake Bank was interviewed by Greg MacSweeney on the Payments Nerds podcast and shared some great insight on their instant payments journey.
Instant Payments Journey
Chesapeake Bank was the 21st bank to join the RTP network back in 2020. They have since joined the FedNow network as well.
That early adoption gave them a front-row seat to how customers were actually using instant payments. One of the biggest surprises? The sheer volume of digital wallet cash-outs. People were using services like Square and Stripe to hit that “pay me now” button and get merchant settlements right away — even if it meant paying a fee for the speed.
This could be an example of merchants wanting to close out a batch of card transactions and see the money immediately — or even on the weekend.
An estimated 40% of Chesapeake’s merchant settlement instant payment traffic happens after hours. Traditional batch windows — often tied to East Coast time zones — just don’t work for everyone. It’s challenging for businesses in California to process a payment before 2 p.m. Pacific.
With instant payments, those constraints disappear. Businesses can get paid when they need the funds — not when the clock or calendar says it’s okay.
Use Case - Trucking
Chesapeake’s Flexent Freight payments platform uses instant payments to speed up their factoring business. When truckers deliver to a large warehouse, they may have to wait 30 - 60 days for payment. With factoring, they can get an ACH payment or get money sent to their fuel card. But ACH speed can vary based on time zones, windows and days of the week. Fuel cards work well, but some smaller truckers use those cards for all their purchasing needs so they end up buying groceries at gas stations that accept the fuel card.
Chesapeake, with the help of Orum, built back end technology so these truckers could receive payments instantly over RTP or FedNow. They could even split payments so some funds were delivered instantly to their bank account and other funds were sent to their fuel card.
This is a good example of how instant payments isn’t replacing a payment, the number of payments actually doubled.
Two months after they launched this product, Chesapeake was making money on this product in addition to bringing value to these customers.
Use Case - Microdeposits for Identity Verification
Some of Chesapeake’s business customers use instant payments for identity verification using micro deposits.
Micro deposits are a great approach to identity verification, but the speed of money movement can impact conversion. If ACH is being used to make that microdeposit, it can take 2 days to make sure that small deposit was processed.
Making that microdeposit instant can speed up the account validation process to reduce dropoff in onboarding new accounts.
Instant Payments to Reduce Fraud and Risk
DJ is passionate about reducing checks due to the fraud risk they present.He pointed out that checks are “ inherently risky objects. Who would want to write their name, account number, and other info on a piece of paper, hand it out, and say ‘debit that account whenever you want’?”
Chesapeake Bank has experienced minimal fraud with instant payments., especially when paired with proper controls.
Banks still managing fraud through next day batch monitoring will need to update their fraud controls for instant payments.
No Extra Staff Needed
Chesapeake didn’t need to hire extra staff to support instant payments volume. Receiving payments especially is passive — no one at the bank has to press a button in the middle of the night for those incoming payments to be accepted.
And with 80% reach for outgoing payments, their customers are seeing broad acceptance.
A Platform for the Future
Chesapeake isn’t keeping all of this know-how to itself. With the help of Alloy Labs, they are working with 20 banks to build a payments platform for community banks. This platform will give small businesses access to modern payment solutions through these community banks rather than buying them from fintechs outside of the banking relationship.
The Bottom Line
As Chesapeake Bank has found, instant payments aren’t just about speed. They’re about control, choice, and solving old problems in new ways — whether it’s replacing checks, unlocking cash flow, or giving businesses payment solutions so they can operate on their terms.