WASHINGTON–The Federal Reserve has now gone live with its new system for instant payments, FedNow.
In a statement the Fed said the new service, which has been years in development, means financial institutions of all sizes can sign up and use the tool to instantly transfer money for their members/customers at any time of the day, on any day of the year.
Among the first to go live in credit unions was Tucson, Ariz.-based Pima FCU, which said it is successfully receiving instant payment transactions on the Federal Reserve’s FedNow Service through Catalyst Corporate. Pima Federal launched its service to members in tandem with the general release of the Federal Reserve’s service on July 19 at 6:01 p.m. central time.
‘Significant Milestone’
“This is a significant milestone for the payments industry. Both members and businesses continue to ask for the flexibility and 24/7/365 availability that instant payments deliver. Beyond the U.S. Treasury Department’s participation in the FedNow Service, it will only be a matter of time until other large players are sending instant payments, increasing our members’ expectations,” said Celyna Cervantes, chief retail officer at Pima Federal. “From day one, our primary goal was to fulfill member demand, enabling them to receive payments from anyone, anywhere, any time. Now, they can rest easy knowing they won’t have to look elsewhere to do so.”
As CUToday.info has reported and as the Fed noted, 35 early-adopting banks and credit unions, as well as the U.S. Department of the Treasury's Bureau of the Fiscal Service, are ready with instant payments capabilities via the FedNow Service.
In addition, 16 service providers are ready to support payment processing for banks and credit unions, the Fed said.
“When fully available, instant payments will provide substantial benefits for consumers and businesses, such as when rapid access to funds is useful, or when just-in-time payments help manage cash flows in bank accounts,” the Fed said. “For example, individuals can instantly receive their paychecks and use them the same day, and small businesses can more efficiently manage cash flows without processing delays. Over the coming years, customers of banks and credit unions that sign up for the service should be able to use their financial institution's mobile app, website, and other interfaces to send instant payments quickly and securely.”
As an interbank payment system, the Fed noted the FedNow Service operates alongside other longstanding Federal Reserve payment services, such as Fedwire and FedACH.
Additional information is available on the Fed website.
Support From Juniper Payments
Wichita-based Juniper Payments, a PSCU company that said it is the largest cloud-based non-bank third-party provider of inter-bank transaction and reporting systems in the U.S., noted it is now supporting live transactions on the FedNow Service.
Through the FedNow Service, Juniper Payments said it is positioned to offer financial institutions access to instant payments, helping them remain competitive and offer best-in-class service for consumers.
“As a service provider of the FedNow Service, Juniper Payments demonstrates dedication to innovation,” said Ken Montgomery, Federal Reserve Bank of Boston first vice president and FedNow Service program executive. “Financial institutions benefit from the ability to offer instant payments through the seamless experience offered by service providers; these critical organizations expand the reach of instant payments and pave the way for industrywide progress.”
To support transaction activities for financial institutions participating in the FedNow Service, Juniper Payments said it completed a multi-step customer testing and certification program in the months leading up to launch.
Catalyst Corporate Goes Live
As noted above, Catalyst Corporate FCU is live on FedNow.
“Pima Federal has been the ideal partner for the initial launch of the FedNow Service through Catalyst’s suite of software applications. They share our vision to be an active participant in the payment evolution and are committed to meeting member expectations for seamless, instant transactions,” said Brad Ganey, chief operating officer at Catalyst. “Together, we are revolutionizing how payments are made which further highlights our commitment to meeting the needs of credit unions.”
Catalyst Corporate said that as a founding member of the U.S. Faster Payments Council and a FedNow pilot program participant from inception, the achievement has been five years in the making.
Acquisition Solidifies Position
“In 2020, our strategic acquisition of Aptys Solutions further solidified Catalyst’s role as a faster payments leader and positioned our credit unions for future success,” Ganey said.
The corporate added that Aptys has grown into a leading fintech that processes billions of transactions annually for 5,500 financial institutions across the country.
“Catalyst and Aptys have built top-of-the-line software applications for full FedNow functionality, with solutions for receiving, sending and settlement,” said Ganey. “Together, we bring a unique perspective to the table: a deep understanding of credit union needs with state-of-the-art technology.”
Seeking New CUs
Catalyst reported it is actively onboarding additional early adopter credit unions for the FedNow Service.
“Regardless of where credit unions are in their faster payments journey, they can sign up now with Catalyst to get in the queue for the FedNow Service, Catalyst said.
For info: catalystcorp.org/fednow.