In January, the Federal Reserve Banks announced that over 110 organisations were participating in the FedNow Service’s pilot program. The program would support the development, testing and adoption of the FedNow Service, as well as encourage the development of services and use cases that leverage FedNow functionality.
A key objective in selecting participants for the pilot was to ensure diverse representation across financial institutions and service providers, connection types, settlement arrangements and experience levels.
The FedNow Service is an instant payment service with the aim of providing a safe and efficient instant payment service for financial institutions across the US. The Service is aiming to be launched to the public in 2023, with the pilot programme testing different features and developing fully before its release. The Service aims to provide businesses and individuals with the ability to make time-sensitive payments, as recipients will receive the money within seconds, allowing institutions and providers to provide innovative instant payment services to customers.
“We’re gratified by the industry’s tremendous interest and willingness to devote time and energy to help us develop the FedNow Service,” said Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the Federal Reserve’s payments improvement initiatives. “As a result, we’ve adjusted to accommodate more participants than we originally planned.”
“The large and diverse group of pilot participants will help us develop a service that meets stakeholder needs and can be rapidly adopted by thousands of US financial institutions and their customers,” said Nick Stanescu, senior vice president and FedNow business executive with responsibility for product management and industry readiness.
Bankers’ Bank – Bankers’ Bank stated it would be a participant of the programme soon after the Federal Reserve Banks’ announcement, and that it would continue its dedication to shaping payments for community banking through its participation in the pilot program, along with its Funding Agent solution for The Clearing House RTP which went live in June 2020.
“We are thrilled to be part of this pilot program that will continue to expand access to instant payments to our bank partners and the communities they serve. Bankers’ Bank is proud of our leading role as a payments innovator for community banking” said Barb Gross, SVP – Chief Information Officer of Bankers’ Bank.
Finastra – announced in March, Finastra joined the FedNow Pilot Programme and said it would help shape and provide input into the service and adoption roadmap, industry preparation, and overall instant payments strategy.
“Finastra has deep expertise and knowledge of instant payment schemes globally, having enabled financial institutions to process payments and implement associated overlay services for instant payment schemes in 12 countries across four continents,” said Ohad Chenkin, Vice President, Product Management, Payments Product and Platform at Finastra. “We look forward to bringing our knowledge and experience to the FedNow Pilot program and to help advance instant payments in the US.”
Finzly – announced earlier in January, Finzly also committed to the pilot programme. The FedNow Service would be implemented in Finzly’s Payment Hub as it supports multiple payment networks through a single, consolidated system and will support newer RTP networks. The Payment Hub is interoperable, allowing FIs to provide customers with a more seamless payment experience as APIs are leveraged open in the cloud to centralize consumer and business payment processing, monitoring, reporting and compliance.
“The FedNow Service marks a turning point in the industry’s move to making real-time payments a reality,” said Booshan Rengachari, founder and CEO, Finzly. “We created our Payment Hub specifically to help FIs prepare and go to market faster with newer RTP networks and address the challenges of offering single payment API for multiple payment networks without having to run disparate payment systems from multiple vendors. We welcome the opportunity to be a part of this historical pilot program and help shape the service’s features and functionality.”