By now you know that the next chapter of the FedNow℠ Service – the official launch – has been slated for July. With only a few months until then, we wanted to share some additional information and next steps for us here at Vizo Financial, but also for your credit union, so you’re ready to go as the FedNow Service saga continues!
REFRESHER: What’s Most Important to Know About the FedNow Service?
The FedNow℠ Service is the newest solution to join the real time/instant payments rail. Other payments rails include ACH, cards (debit/credit), cryptocurrency, cash, checks, etc. The instant payments rail works by initiating and settling payments within seconds through a technology-driven back-end process.
The FedNow Service runs through the Federal Reserve to provide safe and efficient instant payment services 24/7/365 and will give consumers and businesses the opportunity to handle transactions instantaneously so they go from sender to recipient in near real-time.
Transactions through the FedNow Service will happen in just a few simple steps. From initiating the payment to notifying the financial institutions involved and confirming the funds transfer, the entire process works in just a matter of seconds.
Payments through the FedNow Service include:
- Person-to-person (P2P)
- Account-to-account (A2A)
- Bill pay
- Consumer to government
- Business to consumer
- Business to business
- Business to government
- Government to consumer
Credit unions are eligible to utilize the FedNow Service through a variety of participation types and connection options. One of those connection options is Vizo Financial, as we are set to serve as a correspondent provider for the FedNow Service.
For more general information about the FedNow Service – including FAQs, fraud and security procedures, resources and more – please visit the Instant Payments: The FedNow Service page on our website.
STATUS: Where Does Vizo Financial Stand with the FedNow Service?
Currently, the Federal Reserve is moving the FedNow Service into alpha and beta testing. During this pilot testing phase, they will work with a small set of service providers and financial institutions to thoroughly test transactions and settlements through the FedNow Service. Once this smaller subset of institutions has gone through the pilot process, the FedNow Service will expand the next pilot phase to a larger group of service providers and financial institutions to conduct live transactions with their members or customers.
In order to set the Corporate and our credit unions up with a connection and a better understanding of how the FedNow Service will work, Vizo Financial has begun the process of pilot testing with the Federal Reserve through our technology partner, Aptys Solutions.
As part of our pilot trial, we will be adding the ability to assist with both send and receive FedNow Service transactions, so that when the FedNow Service launches in July, Vizo will be able to support all settlement activity for FedNow Service transactions, as well as assist in received transactions for members who will be utilizing those transaction types.
In addition, Vizo Financial is ready to support our member credit unions who wish to participate in the pilot program, which brings us to the next step…taking action!
ACTIONS: What Can Your Credit Union Do to be Prepared for the FedNow Service Launch?
If your credit union is looking to move forward with the FedNow Service when it goes live in July, we encourage you to request a spot on Vizo Financial’s pilot list. All of our members are welcome to be added to this list and participate as a pilot institution. However, before you make the decision to join our list, please know that there may be a delay in how quickly we can add you to the program depending on the service provider(s) your credit union utilizes for core processing, internet banking and mobile banking. With that, here are two possible avenues of action:
If your core is certified with the Federal Reserve for the FedNow Service, and your internet banking and/or core provider will offer FedNow Service functionality to your members, Vizo Financial can work with you to help set up FedNow Service settlement through your institution’s Vizo Financial account. FedNow Service transactions will settle in near real-time 24 hours per day, seven days a week, 365 days per year, and by settling through the Corporate, we will process these settlement transactions on your behalf so you do not need to monitor and maintain your Fed account 24/7/365.
If your core is not FedNow Service certified, Vizo Financial can assist you and your core with sending and receiving FedNow Service transactions through our partners at Aptys. We are able to do so through a FedNow Service transactions API, and we welcome the opportunity to work with your core provider to establish the connectivity necessary to offer the service to any credit union on their platform.
To discuss joining Vizo Financial’s pilot list, please contact your corporate account manager or email us at firstname.lastname@example.org. We’ll be happy to share the details and requirements for participating in this crucial pilot phase through the Corporate.
Like any innovation journey, the saga of the FedNow Service is only just beginning. But July is fast approaching, and the excitement is building. There are still lots of things to do to make sure your credit union is on track to be part of this revolutionary new instant payments solution, so be sure to take all the proper steps to be ready for what is yet to come!
Jeff Stoner currently serves as Vizo Financial’s chief strategy and technology officer. In this role, he directs the development of strategic plans for Vizo Financial products and services. His area also evaluates and implements new products and services. In addition to product strategy, Jeff oversees Vizo Financial’s project management office, internal software administration and member online access system, Zephyr.