Dan Gonzalez is a vice president – national account director for the Federal Reserve’s Customer Relations and Support Office, based out of the Federal Reserve Bank of Chicago. He has overall responsibility for the Federal Reserve’s Financial Services relationships with the top 25 financial institutions in the country, as well as payment networks and service providers. He has over 28 years’ experience in payments, sales, marketing and management in the financial services industry.
The Federal Reserve’s instant payments service, FedNow® Service is here and experiencing robust growth following its July launch, with at least 125 institutions now sending and receiving on the network. In addition, 21 financial institutions are now providing liquidity and settlement services, and 21 service providers are supporting payment processing in the instant payments infrastructure. These numbers reflect a changing payments landscape and suggest growing momentum and interest in the FedNow Service.
But for many financial institutions, it boils down to a handful of powerful questions: What’s next for FedNow? As a financial institution, how do I get started with FedNow? What key considerations and decisions should shape my instant payments journey?
Before exploring these questions, let's listen to what early adopters said about FedNow during the Fed’s Aug. 31 town hall. (And see our summary of the discussion here.)
How’s It Going?
Panelists acknowledged that while customers may not always ask for instant payments by name, their payment activity reflects a strong demand for it, which they expect to grow over time.
"Not all customers know yet what [instant payments] mean to them, but they will adopt and it will become table stakes," early adopter Liana Muller, Senior Vice President of Emerging Money Movement Product Strategy at U.S. Bank, predicted during the Aug. 31 town hall. "It will become something that's expected every day by every consumer and corporate and commercial customer."
“Bob Steen, Chairman and Chief Executive Officer at Bridge Community Bank, called the FedNow Service a ‘giant step forward in payments’ and encouraged other small to medium-sized businesses to get involved,” according to an event summary.
"We're a small bank — if we can do this, you can too," Steen said. "It's important to the industry, and it's important to customers."
What’s Next?
So, what’s next for FedNow?
With a successful initial launch behind it, the Fed will undoubtedly focus on continuing to educate financial institutions about the benefits of FedNow and the onboarding process. According to the Federal Reserve, more than 200 additional organizations have signed agreements to begin onboarding onto the FedNow Service.
Financial institutions should also expect an increase in use cases across the board—B2B, B2C, and potentially the distribution of federal benefits, disaster relief recovery, and payments from government entities, including the Department of the Treasury.
With momentum and adoption building for the FedNow Service, now is an excellent time for financial institutions to consider where they are on the instant payments journey and identify next steps.
Fortunately, Dan Gonzalez, Federal Reserve Financial Services, will be available to help guide the journey in his Future of Payments Symposium session, "FedNow is Here—How It's Going and What's Next," Friday, Nov. 3, from 9 am – 10 am. ET. In addition, Gonzalez will walk attendees through key considerations and decisions for their instant payments journey.
To listen to this session on demand, sign up for 2023 Future of Payments Hot Topics.
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AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.