Financial institutions across the country continue to join the FedNow Service to build and deliver instant payment solutions that their customers or members are demanding.
Some financial institutions join the service as receive-first participants, with plans to enable send later. Others are maximizing the value of the service right away by enabling receive and send capabilities.
The benefits of sending
By allowing customers and members to send instant payments, financial institutions can:
- Gain faster, stronger return on investment
- Provide better customer service
- Retain or gain customers seeking send capabilities
- Discover more revenue generation opportunities than with receive-only
- Reduce costs associated with processing higher-touch transaction types (such as checks)
Tips for easing into send
Financial institutions have the ability to take a measured approach as they ramp up send capabilities with the FedNow Service. A few of the tactics FedNow participants have been using include:
- Picking an initial set of customers — or your own financial institution. Consider enabling only a specific segment of your customer base at first so you can adjust controls early on, then slowly expand to others as you get more comfortable. You also may consider starting with your financial institution’s own transactions to gain experience before enabling customers.
- Selecting lower-risk send use cases. Some participants start with transactions they initiate themselves, such as loan disbursements or paying associates or vendors. You can also start by allowing customers within your financial institution to send to each other (also called “on-us transactions”).
- Reviewing existing operational and technical capabilities. Determine which fraud risk management capabilities you’re already using for other payment types that you can leverage for instant payments. Then, identify any gaps and make upgrades and modifications as needed.
- Collaborating with other trusted financial institutions. Think about other financial institutions you trust that are participating in the FedNow Service. Consider working with them to identify early use cases or customer segments you could allow to send and receive transactions between your institutions.
Learn more
Visit FedNowExplorer.org (Off-site) for more tips on send capabilities with the FedNow Service.
