For many financial institutions, becoming a receive-only participant in instant payments was an important first step. It gave organizations the opportunity to gain experience with the technology, understand account holder demand, and become familiar with how instant payments operate.

As that experience grows, the next step is enabling account holders to send instant payments, which is a much larger strategic decision.

Sending introduces new responsibilities, risks and operational considerations that financial institutions should evaluate before expanding access. Rather than viewing the transition as simply a technology implementation, financial institutions should consider it an organization-wide readiness effort.

Start With Strategy

Before internally discussing technology, fraud controls or implementation timelines, consider asking these three fundamental questions:

• Why do we want to send?
• Which account holder problem are we solving?
• Which account holder segment benefits most?

A clear business purpose should drive the implementation. An organization may identify opportunities such as faster business payments, account-to-account transfers, loan or insurance disbursements, payroll or other time-sensitive payments.

There is also no requirement to make sending capabilities available to every account holder immediately. Starting with a defined account holder segment or specific use case can allow financial institutions to gain experience while managing risk.

Reevaluate Fraud and Risk Management

The risk profile changes significantly when a financial institution moves from receiving to sending instant payments. Potential risks include:

• Account takeover,
• Social engineering and scams,
• Authorized push payment fraud,
• Business email compromise,
• Mule account activity and
• Internal fraud.

The speed of instant payments creates an important operational challenge: fraud prevention needs to occur before the payment is released. Organizations should evaluate whether their authentication, transaction monitoring, velocity limits, fraud scoring, employee controls and escalation procedures can make effective decisions in real time.

Account holder education is also an important part of the fraud strategy. Account holders need to understand the importance of verifying payment information and recognizing scams before they initiate an instant payment.

Prepare for 24/7/365 Operations

Instant payments don't follow traditional banking hours. Moving to send means considering what happens when an account holder initiates a payment on a weekend, holiday or at 2:00 AM. Some questions for financial institutions to consider include:

• Who monitors transactions outside normal business hours?
• Who receives fraud alerts?
• Who handles account holder questions and potential fraud?
• What is the escalation process for an incident?
• Who is responsible for operational decisions after hours?
• How will outages or system issues be managed?

The technology may be available around the clock, but the financial institution's staff and processes need to be equipped to support that availability as well.

Evaluate Liquidity Readiness

Sending instant payments also introduces new liquidity considerations, as funds settle immediately. Treasury and operations teams should consider creating a process to understand:

• How much liquidity may be needed,
• How balances will be monitored,
• Who is responsible for liquidity management,
• How unexpected payment volumes will be handled and
• Responsibilities and processes during evenings, weekends and holidays.

Liquidity management should be considered as part of the initial send strategy, rather than addressed later once the program is already operating.

Consider the Account Holder Experience

Financial institutions should also determine who will have access to send capabilities, how account holders will initiate payments and what controls will apply. Questions may include:

• Which account holders receive access first?
• What transaction limits will apply?
• Will client and business account holders have different capabilities?
• What authentication will be required?
• How will account holders verify payment information?
• What education will account holders receive before using the service?

The account holder experience should leverage the speed of instant payments without making it easier for account holders to make costly mistakes. 

Consider a Phased Approach

Moving from receive only to send does not have to be an all-or-nothing decision. A phased approach can allow an institution to build experience and confidence while managing risk along the way.

One approach you might consider could look like this:

• Phase 1 – Controlled Access: Begin with lower-risk use cases, known account holders, lower transaction limits and potentially internal transfers or selected business and treasury account holders.
• Phase 2 – Expanded Access: Expand business use cases, introduce selected client account holders and consider increasing transaction limits as controls and processes mature.
• Phase 3 – Broader Adoption: Expand access to additional account holder segments and payment use cases while increasing the use of automated fraud decisioning, monitoring and other mature controls.

The goal is not simply to move through the phases as quickly as possible. Each phase should provide an opportunity to evaluate what is working, identify gaps and strengthen the organization's capabilities before taking the next step.

A Five-Bucket Readiness Check

As an institution evaluates its readiness to move from receive only to send, consider these five areas:

1. Strategy: Why are we sending? Have we identified the account holder problems and use cases we want to address?
2. Fraud & Risk: Can we stop bad payments before release? Are our fraud controls, authentication, limits, monitoring and escalation processes ready for instant payments?
3. Operations: Are we ready for 24/7/365? Can our people, processes, systems and support functions operate effectively around the clock?
4. Liquidity: Can we fund instant settlement? Do we have the liquidity strategy, monitoring and responsibilities necessary to support continuous payment activity?
5. Account Holder Experience: Who gets access, and how do we educate them? Have we determined who should send, what they can send and how we will prepare them to use instant payments safely?

Moving Forward

The transition from being a receive only participant in instant payments to sending is more than enabling another payment capability, it represents a change in how a financial institution manages payments, risk, operations, liquidity and account holder expectations.

Financial institutions do not need to have all the answers before beginning the conversation. However, they should understand the questions they need to answer. The key is to start with the account holder need, build the appropriate controls around that need and expand capabilities as the organization's experience and readiness grow.

Moving to send successfully is not about being first. It is about being prepared.