How Financial Institutions Adapt to Instant Payments

RTP, FedNow, and faster payments adoption - OH MY! 🚀 Financial institutions: the faster payments ecosystem is fragmented, with FedNow and RTP networks operating independently. This creates serious operational challenges around which rail to prioritize with limited technical resources. I keep hearing the same concern in conversations with institutions of all sizes—nobody wants to back the "wrong" rail and fall behind. But here's what I've learned: you don't have to choose one network over the other. The path forward requires strategic integration of both networks: • Implement intelligent routing systems that optimize decisions based on liquidity, limits, and latency requirements • Use ISO 20022 messaging standards to enable data-rich transactions (while timelines keep shifting, major PMIs are working toward adoption) • Prioritize Request for Payment (RfP) capabilities, which U.S. Bank highlighted as key for driving instant payment adoption • Work with API-based platforms and service providers that can seamlessly access both networks rather than waiting for perfect interoperability From the customer perspective, payment rails should be invisible—just like we don't think about which cell tower we're connecting to when making a call. Your customers deserve that same seamless experience. ✨ Curious how you're approaching faster payments right now. Is your team still treating RTP and FedNow as competitors, or are you working to unify your strategy across both? Let me know how you’re tackling these challenges in practice! #paymentselsa #fasterpayments #instantpayments #payments #innovation

What an incredible FedNow Townhall last week! Huge thanks to @Stephanie Miracle for shaping such an informed discussion and Michele Mihal and Jason Greenwood for sharing real-world success stories, as well as Dan Gonzalez & Mollie Markham for their insights on instant payments. Here are my takeaways if you’re a FI senior leader looking to streamline operations, enhance customer satisfaction, and stay competitive: * Start Small, Scale Fast. --> Pilot instant payments with a limited group (e.g., branch staff or specific business segments) to gather feedback and prove ROI. Then expand to broader channels like mobile/online banking. * Immediate Problem-Solving -->. Debit card compromised? No card for 7–10 days? Instant payment transfers let customers stay afloat without waiting for new cards. This real-time fix improves trust and loyalty. * Eliminate Escheatment Hassles --> Out-of-state members no longer need to wait on mailed checks. FedNow’s real-time Send keeps operations lean and prevents those dreaded stale checks and return-to-sender nightmares. * Payroll & Earned Wage Access --> Stay competitive in the fight for talent by offering same-day or on-demand pay. Instant wage access is quickly moving from a “nice-to-have” to an expectation. * 24/7 Availability—No Extra Staffing Required --> Real-time payments don’t mean you need a full team on the clock overnight. Automated alerts, risk controls, and set thresholds can keep things running safely in the off-hours. * Request-for-Payment “Utopia” --> FedNow’s upcoming feature will streamline invoicing and payment settlement, giving businesses and FIs a faster, more secure way to reconcile funds. Action Items for leaders at Financial Institutions: Action Items for COOs & CFOs: 1. Prioritize High-Impact Use Cases: Identify quick wins—like payroll, card compromises, or after-hours transactions— show your stakeholders the immediate ROI. 2. Communicate Early & Often: Educate both your team and your customers on how real-time payments work, emphasizing the convenience, security, and speed. 3. Leverage Partners & Industry Resources: You don’t have to navigate this alone. Collaborating with FedNow service providers & experienced consultants streamlines integration and reduces risk. 4. Embrace the Competitive Edge: Many businesses already require instant payment options. Being an early adopter sets you apart & helps retain loyal customers. By joining the FedNow (& RTP) network, you’re not just enhancing your operations; you’re also future-proofing your institution. The risk is lower than many think—especially with built-in tools like transaction thresholds and real-time authorization that keep everything secure. If you have questions or need guidance, I’m here to help you navigate this exciting evolution in payments. Let’s make it happen together! #FedNow #InstantPayments #PaymentsModernization #RealTimePayments #BankingInnovation #COO #CFO #FinancialServices #thefutureisnow #InstantPaymentsMaven

Today's daily dose of Payment... #InstantPayments Aren’t a Trend. They’re a Test — of Vision, Readiness, and Resilience. ⚡️ In a standout session hosted by #Alacriti, leaders from First Internet Bank Kathryn Duffer, Veridian Credit Union Amy Faley, and ABNB FCU Cassandra Tucker opened up about their instant payments journey — and their stories couldn’t be more relevant. What started as a “tech upgrade” has now become a strategic litmus test: Will your institution lead, follow — or fall behind? Here are 5 executive takeaways that left me thinking: 1. Real-Time is Real Strategy. Veridian saw 42% of instant payments happen after hours. Why? Because modern consumers live in a 24/7 world. If your payment rail clocks out at 5PM, so does your relevance. 🕐 Speed is table stakes. Availability is advantage. 2. Don’t Wait for Demand to Speak Loudly. ABNB didn’t wait for members to ask for instant payments — they saw the invisible need: underserved communities, wage access gaps, and liquidity friction. Instant payments became the solution before the problem even had a name. This is what proactive innovation looks like. Build for what’s next — not just what’s now. 🏦 3. Partnerships Matter More Than Products. First Internet Bank’s transition to Alacriti’s Orbipay Hub wasn’t just a vendor switch — it was an upgrade in alignment, API readiness, and strategic execution. The result? One hub. All rails. Real transformation. Choose partners who aren’t just selling, but scaling with you. 🤝 4. Monetization Without Friction is Possible. ABNB charges for Send functionality — and members are fine with it. Why? Because people already pay for speed on platforms like Venmo and PayPal. Veridian opted for a no-fee approach for retail members, while monetizing through fintech's. Either way, the playbook is clear: 💡Instant Payments = #Monetizable Moments. 5. #Instant Payments Aren’t Hard — Just Misunderstood. All three institutions shared the same verdict: the implementation wasn’t difficult. ➡️ The real work was in internal education, cross-functional alignment, and having a clear use case strategy. If your org is still on the fence, the message from the front lines is clear: Just do it. ✅ This isn’t about “early adoption” anymore. It’s about relevance, resilience, and readiness in a world where speed, trust, and integration define who gets to lead the digital money movement. The rails are here. The use cases are ready. The only thing missing may be your institution. #InstantPayments #RealTimeRails #FedNow #RTP #Fintech #CreditUnion #CommunityBanking #DigitalTransformation #PaymentsInnovation #BankingModernization #OpenBanking #Alacriti MasterCard Community Banks and Credit Unions Visa Mastercard American Express J.P. Morgan Apple

Today The Clearing House announced that come early February the transaction limit for its real time payments (RTP) rail will increase from $1 million to $10 million. The vast majority of RTP transactions are from businesses to consumer or B2C (lots of payroll and disbursements, as well as transfers from a consumer's primary checking to brokerage, or vice versa which feel like C2C but are technically B2C). But the expanded transaction limit will increase the relevance of RTP for B2B supplier payments and for intercompany transfers and settlement transactions (i.e. JPMC delivering funds to a merchant for whom it processes payment). As a reminder, RTP facilitates 24/7, good funds, push payments from bank account to bank account that settle instantly. Most countries have only one real time (also knowns as instant payment) rail, but in the U.S. we have two. (FedNow is the second one. It is primarily used by smaller banks and it's transaction limit remains $500,000.) Recognizing that most B2B transactions are not urgent, for those that would benefit from instant funds movement, what would it take for B2B use of RTP to really take off? ✅ Adequate safeguards to prevent business email compromise and authorized push payment fraud ✅ Widespread adoption of request to pay/ebills across ERP/accounting, AR/billing solutions, and industry vertical software providers that embed billing and payment, and acquirers that enable invoicing and payment ✅ A means to look up where to send the ebill or e-invoice e.g. which AP provider does this business buyer work with? ✅ Intentional 'cannibalization' of other rails through value based pricing of business transactions that balances the benefit and cost for both buyers and suppliers, taking into account speed, data capacity, risk mitigation, whether credit is extended, etc. ✅ Protection of sensitive payment account credentials, via tokenization of credentials, legal entity identifiers tied to payment credentials, or other means so that businesses can plaster instructions “pay me here” openly on their invoices, website, and wherever else they please What else would facilitate broader B2B use of RTP (and FedNow)? (I've linked to some relevant prior posts in the comments)

FedNow, the Federal Reserve System's instant payment rail, made real-time payments accessible to everyone in the US for the first time. The #FedNow Service, which launched just 2 years ago, gives financial institutions & other organizations a chance to offer businesses and #consumers instant payment solutions. In order for products that deliver the convenience of instant #payments to be successful, each stakeholder in the payments ecosystem must work together. Let's see who is involved and how FedNow flows from start to finish. --- What are the components of the payments ecosystem for FedNow that need to work together? 🏦 Financial Institutions: FIs will use the FedNow Service to build & offer instant payments to their customers, usually with solution provider support. Banks & credit unions fall under this category. 💳 Financial Institution Service Provider: They will enable financial institutions to offer an instant payment solution to customers like FedNow connectivity, transaction processing, etc. Payment hubs, processors, & core banking platforms. 💸 End-User Solution Provider: These providers work with FI partners to help build out and develop instant payment services that end-users can use. Think POS terminals & bill payment software. 🛒 End-User: End-users are the ones sending & receiving money. These are the business, consumers, government entities, and so on. --- So what's the flow look like? A consumer chooses to pay at a grocery store checkout with the merchant-offered 'pay-by-bank' solution, provided through an end-user solution provider that enables and facilitates access to FedNow. To a consumer, this would be a QR code that they could scan with an app that is connected to their bank account. Once scanned, the end-user solution provider sends a request for payment (RFP) to the grocery store's financial institution. That FI then uses its FI solution provider (a gateway) to convert the RFP to an ISO message, sending it to FedNow. Once validated ✅, #FedNow sends the RFP to the consumer's financial institution, who confirms its the correct account and receives the RFP. It then initiates the payment, which flows through the Fednow Service and then to the merchant FI. Finally, the merchant FI receives the payment and notifies the consumer FI, the merchant receives the transaction reference number (for easy reconciliation), and the consumer receives a notification from her FI that the payment was received. --- If FedNow is something a company is considering including, it's important to learn about how it works, strategize to see where it fits into an organization's business model, and collaborate with solution providers, like FreedomPay, or financial institutions to enable it. #FinTech #ecommerce #realtimepayments #merchants