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Instant Gratification, Lasting Impact: The FedNow® Service is Redefining Member Payments

August 14, 2023

By Mark Keeling, Catalyst Corporate Senior Manager, Payments Strategy & Product Innovation

The FedNow® Service is a new instant payments rail that will redefine the way your members make payments. The FedNow Service represents the first new payment platform introduced by the Federal Reserve since the inception of ACH back in the early 1970s. This new payment network is designed to seamlessly facilitate instant payments throughout the United States.

Now, if you’re wondering whether it’s the right time to implement the FedNow Service, ask yourself one simple question: Would your members rather get paid now, or, would they rather get paid later?

Most would opt for instant gratification. Recent studies corroborate this sentiment, with aFedNow Service staggering 70% of consumers expressing that having faster payment options from their financial institution is an important driver of satisfaction.

Major financial institutions have been performing instant payments for a couple of years, and both consumers and businesses favor the convenience they offer. The momentum is further catalyzed by the U.S. Treasury, which is piloting the usage of the FedNow Service where speed is particularly important. This endorsement will change the way the world operates – and your members’ expectations – overnight.

This is where credit unions play a pivotal role: embracing the cutting-edge instant payment capabilities ushered in by the FedNow Service and supporting their members as they find more and more ways to use this convenience. Financial and business arenas are rapidly transitioning to 24/7/365 business operations. Becoming part of the evolution now will ensure you're prepared when your members expect it.

As a FedNow Service early adopter and the first financial institution to go live in the Federal Reserve’s 11th District, Catalyst has been preparing for the FedNow Service for 7-8 years. Catalyst's instant payment solution for the FedNow Service is already active and includes connectivity to the Fed and an open API to core, online and mobile banking providers. What sets Catalyst apart is its role as an end-to-end provider with send and receive transaction services, as well as enhanced settlement services.

The FedNow Service will bring value to your credit union in ways you won’t want to miss. Are you ready to stand out in the market and gain a competitive advantage? Reach out to your Catalyst experts today or attend one of our upcoming Faster Payments Essentials workshops. They’ll provide best practices and details you need to make the most of the FedNow Service.