Reed Luhtanen, Executive Director, FPC
Five years ago, the industry might have been “scared” of faster payments, but this October, fear seems to have left the building. RTP® recently surpassed 1 million payments in a single day. Just two months after launch, the FedNow® Service has more than 100 participating organizations sending and receiving instant payments. And the latest figures from Nacha on Same Day ACH demonstrate a 20 percent increase in transaction volume and 27 percent increase in transaction value for the third quarter of this year, compared to last year. With volume, value, and participation growth like this, it’s safe to say the industry has no fear when it comes to faster payments.
At the FPC, we want to continue to take the anxiety out of faster payments by addressing any lingering concerns. For example, the recently released Operational Considerations for Instant Payments Guideline, developed by the Operational Considerations for Instant & Immediate Payments Work Group, delivers a primer on operational considerations for receiving instant payments. Given today we have two instant payments services, navigating the operational aspects of each and how they impact back-office processes could prove challenging. The Guideline outlines information such as flows/processes, liquidity management, fraud mitigation, exception processing, staffing needs and training requirements, and more, giving financial institutions the knowledge to be able to easily embrace instant payments. This Guideline is the first in a series of resources to be released over the coming months that focus on the operational aspects of instant payments. Subsequent guidelines will cover the send side of instant payments as well as non-value messages, i.e., Request for Information, Request for Payment, and Request for Refund. These complementary resources will help ensure the industry can fearlessly leverage all aspects of instant payments.
Additionally, the Education & Awareness Work Group just released an updated version of the Faster Payments Glossary of Terms. Common nomenclature is critical for industry understanding, and that shared understanding drives the trust and certainty needed to continue to advance faster payments. The updated glossary has made it even easier for the industry to find the answers to eliminate ambiguity. Users can now search by keyword and filter by category, with up to 13 distinct categories to filter on. The updated glossary also now includes a suggestions/feedback area. We’d like to hear from you on terms that are missing, could use additional clarification, etc. This will ensure this resource remains a “living document” that will evolve as the industry evolves and continually improve the shared understanding of faster payments.
And last, but not least, our Financial Inclusion Work Group is getting ready to close a survey that seeks to understand how organizations are addressing financial inclusion in their faster payments strategies. We hope to use the findings to share insight on how faster payments can be leveraged in support of the unbanked and underbanked, shedding light on how to provide better support for an audience that has largely remained outside of the traditional banking environment.
While we’re celebrating the season of fright with Halloween, industry trends show us that faster payments are no longer a scary endeavor. Momentum is growing, and by developing the tools and resources to enhance knowledge and understanding, we can mitigate concerns. So, if you haven’t had a chance to view our latest resources, be sure to check them out in the Knowledge Center. They’re certain to provide peace of mind.