WASHINGTON—The Fed’s new FedNow solution will have as significant an effect on payments as Uber had on transportation, attendees at NAFCU’s Congressional Caucus were told.
That view and others were shared during a panel discussion hosted by NAFCU Senior Counsel for Research and Policy Andrew Morris and which included as panelists Jim Hunsanger, chief risk officer at Michigan State University FCU; Cynthia Nelson, president and CEO of EasCorp, and Stephanie Miracle, product director of the FedNow Service.
The panel discussed the pilot experience, use cases, and features of FedNow.
According to NAFCU, Hunsanger described MSUFCU’s positive experience as a pilot participant, noting the interactions with the Fed and opportunity to provide feedback instilled “a lot of confidence in the system.”
A Doubling of Participants
Miracle shared that the number of participants since the service launched has roughly doubled, and about one-third of financial institutions participating are small- and mid-sized.
Exploring use cases, Nelson compared FedNow’s transformation of the payments space to Uber’s impact on transportation. “The most interesting use cases are the ones that we haven’t even thought of yet,” she said, further stating the service is providing “the foundation for financial institutions’ payments innovation.”
While the three panelists touted many benefits of instant payments and FedNow, NAFCU reported they also acknowledged concerns related to fraud. Nelson said credit unions have been doing a good job of managing risk and fraud, and all panelists described how financial institutions can proactively put policies and procedures in place to educate employees and members to ensure a positive experience with FedNow.
Help Combat Misinformation
Nelson also called on credit unions to help combat misinformation about FedNow to ensure consumers understand that it is a “reliable, secure, efficient network with operating rules and oversight of the Federal Reserve,” just like other payments channels.
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