Welcome to Innovating Payments Top 3 News Headlines for the Week of Feb. 11, 2024. Cory Barnes, Senior Product Manager at Form3, told PYMNTS, "Interoperable schemes-linking RTP® and FedNow®-could expedite the overall pace of growth for instant payment in the United States." What's more, APIs could be one way to do that. Meanwhile, the Federal Reserve recently shared with FedNow Service participants information about two new risk management features that will be rolled out in 2024-25. With faster payments surging in popularity, some experts wonder if instant debit payments are the next phase in real-time payments.
Read on to learn more.
1. APIs Promise to Make Instant Payment Systems Interoperable (PYMNTS)
Cory Barnes, senior product manager at Form3, told PYMNTS that instant payments can reach their full potential only when far-flung systems are truly in sync and interoperable." The expectation with instant payments is that they are frictionless," he said. "It's all about the end user." Real-time payments have been a reality over The Clearing House's RTP Network for the past seven years and across the Federal Reserve's FedNow® Service since July. (Read more.)
2. Upcoming features will help FedNow® Service participants manage fraud risk (Federal Reserve)
The Federal Reserve recently shared with FedNow Service participants information about two new risk management features that will be rolled out in 2024-25. These new capabilities will complement financial institutions' own fraud risk management approaches and join the set of tools already available through the FedNow Service. One of the upcoming features will give financial institutions the ability to configure thresholds to reject payments that exceed a defined cumulative value or velocity threshold. (Read more.)
3. Instant Debit Payments: The Next Phase of Real-Time Payments (Payments Journal)
Faster payment methods are experiencing a surge in popularity as more consumers want to send and receive payments in a faster way. Real-time and faster payment networks such as FedNow, RTP, Same Day ACH, and Zelle, a peer-to-peer payment platform, are seeing rises in transaction volume and value as consumers demand more speed and convenience with their payments. FedNow, the long-awaited instant payment service built by the Federal Reserve Bank, was launched on July 20, 2023, to facilitate the sending and receiving of funds within seconds. You could say that this launch completes the missing puzzle to establish a nationwide real-time payments solution. (Read more.)
How important do you think interoperability between RTP and FedNow is to the widespread adoption of instant payments? Are you seeing or hearing about attempted fraud via FedNow? Are instant debit payments the next phase of real-time payments? What do you think?
Check back soon for our next issue, highlighting the industry's most pressing and need-to-know developments. Until then, visit us online at Innovating Payments.
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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.
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