Build a Plan for Instant Payments
Instant payments are the future in financial services. It is the first new payment rail to be put into operation in over 50 years. Settling immediately, this payment type provides customers with the ability to pay anyone, anywhere, anytime so that funds can move as fast as people.
Some banks have implemented or are planning to implement instant payments in 2023, but most banks are still in the planning stage, deciding how and when to connect to the new payment rail. Banks must be connected in order send and receive instant payments. The Federal Reserve Bank recently launched the FedNow® Service, enabling participating banks to safely and efficiently transfer funds instantly. Once a bank chooses to connect, there are some considerations and decisions to make in order to build a plan.
There is no “one size fits all method” when it comes to adding instant payments as a new payment option. One of the first decisions to make is whether your bank plans to send and receive instant payments, or receive only. The majority of banks we hear from indicate they plan to receive first and then create a plan for offering the capability to send at a later time. BBOK is aligned with this plan and will launch an instant payments module in PATH late August, early September to support our customers who choose to receive first.
If your bank chooses to receive first, the considerations below can help guide you in building a plan.
- Select a vendor. Consider BBOK as your bank’s partner to receive payments.
- Ensure the vendor you select can integrate with your core.
- Initiate paperwork with the Fed in order to connect to the FedNow® Service.
- Designate BBOK as your Settlement Agent (Receive Only)
- Determine your technology needs for providing customer notifications.
When you choose BBOK as your partner, we will be there to help you along the way.
- We will work with you on core integration needs.
- We can discuss with you how to provide customer notifications.
- We will participate with you in a call with your Fed Rep to initiate/finalize paperwork.
- We will provide a simple Service Addendum and schedule of fees for review and signature.
If your bank has already selected a vendor, you can still implement Settlement (Receive Only) through BBOK. Contact us and we will work with you on the remaining considerations.
Unsure if your bank is going to receive instant payments? Don’t stress, you are not behind! Continue gathering information. BBOK routinely updates our Payments Resource page to share information on instant payments. Utilize the information to assess your customers’ needs and make an informed decision. We also provide educational tutorials from Kevin Olsen, Payments Professor, to all of our customers. These tutorials are a great way to help anyone in your bank learn more about instant payments and the FedNow® Service.
Share your information below to connect with Daniel Hayden, Tracy Stewart or Bryan Blundell to have a conversation about implementing instant payments. If your bank plans to start receiving instant payments in 2024, now is a great time to connect!