By Glenn Wheeler, Director of Item Processing Operations
Despite challenges brought forth by the COVID-19 pandemic, the nation’s faster payments initiative is still pushing forward in 2020.
The Faster Payments Council recently held its virtual Fall Member Meeting to share critical, emerging information and engage in dialogue supporting faster payments progress.
Ken Montgomery, first vice president and chief operating officer of the Federal Reserve Bank of Boston, and leader of the FedNow℠ Service, served as the FPC’s opening speaker. During his session “Next Steps for Nationwide Instant Payments: the FedNow Service,” Montgomery shared various industry trends and provided an update on FedNow – including an overview of the phased development plan. On track for its 2023-2024 target launch date, work on the instant payments solution continues, with several notable developments in recent months.
Following the Fed’s latest announcement, there was substantial discussion around the initial features and functionality of FedNow, Montgomery said. Among the many capabilities the service is expected to offer are:
- ISO 20022 message standard
- Transaction value limit (with option for participating financial institutions to establish lower transaction value limits)
- Reject payment by account number
- Request for payment
- Liquidity Management Tool (LMT)
- Seven-day accounting
Montgomery also identified key areas of focus within the new system, including:
- Accessibility
- Interoperability
- Reconciliation and reporting
- Safety and security
To help drive further progress, the Federal Reserve FedNow Team has established Community Working Groups – short-term teams convened to focus on specific FedNow development tasks or challenges. Among the latest is the FedNow Reconcilement Working Group, which seeks to “collaborate with the payments industry to identify desired data, tools and service features to ensure financial institutions can reconcile with the Fed and their customers for FedNow transactions.” Catalyst Corporate Chief Financial Officer Melissa Wardell and I are serving on this newly formed Working Group.
Dialogue and collaboration served central roles during the FPC Member Meeting. Roundtable sessions generated ideas for faster payments use cases and interoperability next steps. Work Group breakouts were held to further advance the projects and work efforts of the six FPC Work Groups.
In early August, the FPC released a new white paper, Examining Faster Payments Fraud Prevention. Developed by the Fraud Information Sharing Work Group, this industry resource “examines current fraud themes and trends, and approaches for mitigating these risks in a faster payments environment.”
The Education & Awareness Work Group (EAWG) recently published a new Members-only resource: Faster Payments Glossary of Terms. EAWG team members, combed through over 2,000 industry definitions to compile this list of 180+ well-defined, highly relevant faster payments terms.
Catalyst Corporate’s involvement in FPC initiatives continues to expand, including the recent appointment of Catalyst Corporate Chief Operating Officer Brad Ganey to the new FPC Inaugural Board Advisory Group. Our intent is to represent the collective voice of our member credit unions and the industry in all facets of the faster payments discussion.
Catalyst Corporate will continue to keep credit unions abreast of the latest faster payments developments. Stay tuned for more updates from the U.S. Faster Payments Council.