The importance of getting your credit union connected to an immediate payment rail continues to grow. The RTP® network’s real-time payment capabilities are already accessible to financial institutions that hold 75% of U.S. demand deposit accounts, and that number will likely increase when the FedNowSM service becomes operational later this year.
Because credit unions are aware of the importance of connecting to these payment rails, I often get asked the following questions when I’m giving educational presentations on immediate payments:
The following information should provide some insight into these two questions.
What does it take to implement an immediate payments program?
Even though there’s no “easy” button for implementing an immediate payments program, detailed guides do exist that outline the exact requirements of each payment rail. Once you have a baseline understanding of immediate payments, you can review each rail's service offerings and capabilities and strategize what you need to do next.
For example, The Clearing House’s RTP® Network Readiness Checklist for Banks and Credit Unions and the Federal Reserve’s FedNow Service Readiness Guide provides in-depth information on connecting to each rail, covering topics like payment flow, participant options, ISO® 20022 message specifications, technology planning, and more. In addition, our RTP Info Center has a wealth of articles, webinars, and infographics created by Corporate One, the U.S. Faster Payments Council, The Clearing House, and the Federal Reserve to help you learn how you can get connected.
Should I wait for the new FedNow Service to launch before deciding which network to choose?
Unfortunately, the current RTP network and the upcoming FedNow Service will not be interoperable. This means your credit union will (eventually) want to be at least able to receive payments on both rails. And although your members may not be asking you specifically for immediate payments, the demand is there; everyone wants their money in real time, and it’s vital for your credit union to meet these expectations so you can remain competitive and relevant and reap the benefits.
In addition, because implementing a new payment rail takes some time, I recommend that credit unions make connecting to the RTP network with a receive profile (at least) a strategic priority as soon as possible. Fortunately, the RTP network has been up and running successfully since 2017, which means you don’t have to wait for the launch of the FedNow Service months from now. Both readiness guides mentioned earlier explain what it means to have a “receive” profile on an immediate payments rail.
For more information, I encourage you to reach out to me at 866/MyCorp1 or via email@example.com to have a conversation about the next steps in your immediate payments journey.
VP, Product Market Strategist