Newsroom
The latest on instant payments, FedNow
With the FedNow Service underway, there are several resources for credit unions to better understand the platform and payments innovations. According to Federal Reserve research released in May, strong majorities of businesses (83 percent) and consumers (75 percent) are already using faster payments, and most say they are likely to use faster payments more often in the future.
Tomorrow, NAFCU is hosting a complimentary webinar to demonstrate the Federal Reserve’s FedNow Service and discuss key considerations for onboarding to the service at 2 p.m. Eastern. Senior Vice President of FedNow Product Management Dan Baum will host the webinar.
In addition, the Federal Reserve is hosting a FedNow Town Hall Webinar Aug. 31. During the 90-minute event, attendees will hear from financial institutions that are live on FedNow about their launch experiences and use cases within instant payments. Registration is available online.
As demand continues to grow, here are four things that are important to know for financial institutions just getting started on the instant payments journey:
- What’s trending around the world. Instant payments, along with other types of faster payments, are quickly growing in popularity around the world and gaining momentum in the United States. According to PYMNTS latest Real-Time Payments World Map from 2023, 79 countries now have at least one real-time payments, compared to just 14 countries eight years ago. See highlights of faster payment trends in India, China, Europe, the U.K. and more.
- How faster/instant payments work. When it comes to instant payments, the end-user process may seem simple: User number one sends a payment and, moments later, user number two is notified that they’ve just received the payment. That’s simple enough, but the behind-the-scenes process can vary and feature different risks and benefits. To better understand the faster payments process, take a look at this hypothetical payment.
- The differences between fast, faster and instant payments. Many people use the terms “fast,” “faster,” “real time” and “instant payments” interchangeably. To consumers, faster and instant payment systems may seem similar, but things aren’t as similar behind the scenes. Faster payment systems can differ in several ways, including how clearing and settlement occur between financial institutions. These differences may affect how financial institutions design the services offered.
- Fraud and instant payments. There’s a lot to love about instant payments, but as with any type of payment, the potential for fraud exists. In general, the actions financial institutions, consumers and businesses take to minimize fraud with other payment types are also applicable for instant payments. However, due to their speed and irrevocability, instant payments require some unique considerations. Financial institutions thinking about instant payments adoption should consider taking a holistic approach to fraud prevention, particularly in cases where existing fraud solutions and processes may be based on batch processing or manual intervention. Learn more.
For more information on instant payments, visit FedNowExplorer.org.