With less than a month remaining until the official launch of FedNow® in July, industry pilot testing of the Federal Reserve’s new instant payments network is in full swing. Supported by payments modernization experts and strategic partners like Volante, banks and financial institutions are now affirming their ability to connect to the FedNow payment rail and execute many customer transactions, including send, send-and-receive, and Request for Payments.
The pilot testing and certification program, which formally began in April 2023 following multiple phases of the initial FedNow Pilot Program, will serve as a final validation of the network’s functionality ahead of its release. As the official launch date nears, the Federal Reserve continues to encourage banks to join the growing ranks of participating institutions, to maximize the availability and benefits of real-time payments throughout the U.S.
Widespread adoption of the FedNow system promises a number of transformational benefits for both consumers and businesses, from instant settlements and reduced transaction costs, to increased visibility, security, and flexibility when it comes to tracking finances and sending and receiving time-sensitive payments. For banks, including smaller to medium-sized institutions, the implementation of FedNow represents an opportunity to expand their reach through the introduction of new, innovative real-time payments products onto the market.
However, as the release date approaches, many banks across the country have yet to update their systems to connect to the FedNow network. But while the window of early adoption may be closing, there are plenty of actions that institutions can take right now to prepare for the launch, regardless of their current level of readiness:
Start preparing today. It might sound all too simple, but the best way to make up for lost time is to make effective use of the time you have in front of you. Moreover, with the introduction of an official launch date, banks now have the opportunity to construct an implementation plan around a specific timeframe, making it easier to define objectives and track progress against an established target.
Adopt a “fast follower” mindset. Being the first doesn’t always mean being the best, and in fact assuming the role of a “fast follower” as opposed to an early adopter comes with its own unique advantages. By accelerating efforts to integrate real-time capabilities, while tailoring their approach to reflect the successes (and avoid the challenges) of early adopters, banks have an opportunity to make a more informed and strategic entry into the world of instant payments on FedNow.
Find the right strategic partner. Finally, there are virtually no payments modernization strategies that can’t benefit from the knowledge, expertise, and guidance provided by the right strategic partner. In fact, leading cloud-native payment providers like Volante have been instrumental in bringing the kind of technological agility necessary for the seamless adoption of real-time payments, as well as the replacement of outdated legacy systems, to institutions of all sizes and disciplines around the globe.
Looking to improve your institution’s readiness and real-time payments strategy ahead of the FedNow launch? Learn more by scheduling time to speak with one of our payments experts or by visiting volantetech.com.