Where Faster Payments is Headed in 2023
This has been a tremendous year in the faster payments space, with ongoing development of FedNow and continued growth in The Clearing House’s RTP Network. Bankers’ Bank has actively participated in the FedNow Pilot, providing feedback and development suggestions for The Fed’s first new payment rail in over forty years. FedNow is on schedule to exit the pilot phase in 2023, with general availability between May and July, including complete pricing and rules. At that time, Bankers’ Bank will support FedNow settlement and liquidity services for participating respondent banks. Meanwhile, RTP ended 2022 with more than 300 financial institutions live on the network having processed approximately $170 million in instant payment transactions.
Most adopters of RTP have been community banks looking to improve customer experience in making deposits and receiving disbursements, such as payroll or account transfers. As more disbursers embrace the advantages of 24/7/365 instant payments over slower payment types such as ACH and Push-to-Card, the month-over-month increases in transaction volumes seen in 2022 will continue. Some banks are developing instant payments use cases, positioning themselves to adopt RTP Send capability. This will allow customers to send an instant payment, have assurance that it was posted to the correct account in seconds, and perhaps pay a fee for the convenience.
Throughout 2022 our team worked with our partners at The Clearing House and The Fed to help community banks recognize the value of instant payments, including joint efforts with both state banking and payments associations. In addition, as part of our involvement in the FedNow Pilot Program, Bankers’ Bank was recently selected to join the Request-for-Payment Workgroup. Once live, this capability will allow banks of all sizes to offer an instant payment invoicing service to their customers. While instant payments remains “credit-push” only, this service enables small businesses to request a payment, with their customer able pay the invoice immediately or defer to a later date. The security, convenience, and good funds model of instant payments could revolutionize small business invoicing.
If you are interested in learning how Bankers’ Bank can support FedNow or your liquidity needs for RTP Send, please reach out to firstname.lastname@example.org to talk with our team.