The Fed, as promised, is beginning to roll out its FedNow Instant Payments network through a pilot program. Yesterday they named names and issued a list of the willing participants in their press release. They describe the purpose of the pilot as follows:
Through their involvement in the FedNow Pilot Program, participating financial institutions and processors will help shape the product’s features and functions, provide input into the overall user experience, ensure readiness for testing and be the first to experience the FedNow Service before its general availability. In the initial advisory phase, participant input will help to further define the service and adoption roadmap, industry readiness approaches and overall instant payments strategy.
Of particular importance in my mind is the list of processors who will be working to develop the integration tools to help their financial institutions with the technology requirements to connect to FedNow and take advantage of the opportunities of real time payments. Processors involved in the pilot include ACI Worldwide, Finastra, Finxact, Fiserv, Jack Henry, and Shazam among many others. A full list can be found here.
ACI, who supports real-time payment platforms around the world including much of the UK’s Faster Payments volume, solutions in Malaysia, Singapore, Australia as well as The Clearing House RTP and Zelle here in the U.S., issued their own press release on the matter. They commented:
ACI Worldwide will help shape the FedNow Service’s features and functions, provide input into the overall user experience, ensure readiness for testing and be the first to experience the FedNow Service before its general availability. In the initial advisory phase, participant input will help to further define the service and adoption roadmap, industry readiness approaches and overall real-time payments strategy.
“ACI is committed to the advancement of real-time payments in the U.S., and we look forward to helping the Federal Reserve develop its first major new payment system in four decades,” said Craig Ramsey, head of real-time payments, ACI Worldwide. “The consumer demand for speed, convenience and simplicity with payments will continue to increase, and we are eager to work with the Fed and other pilot participants to drive the successful implementation, adoption and monetization of real-time payments in the U.S.”
The importance of the technology providers’ participation will be to connect financial institutions that without the help of processors would not have the where-with-all to handle the complexities of an integration which can take many months and millions of dollars to accomplish otherwise. They will also play a key role in insuring that there is interoperability between the Fed’s FedNow and The Clearing House’s RTP.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group