7 Lessons Learned by FedNow® Service Participants

Since the FedNow Service launched in July 2023, more than 1,000 financial institutions across the U.S. have joined the network. These leading-edge organizations have learned plenty of valuable lessons along their instant payments journey. Here are some that participants have shared:

1. Getting started now has added benefits. Financial institutions adopting the FedNow Service are positioning themselves as innovators and improving customer experience by offering instant payments before many of their competitors enter the market. In addition to meeting customer demand, implementing instant payments now has allowed them time to test capabilities in house before rolling out services, and to refine their products and processes.
2. Enabling send and receive together can save time and resources. Some financial institutions that started with receive capabilities and enabled send later have told us they wish they had enabled send from the beginning, which would have been more cost and time efficient and helped them gain greater, faster return on investment.
3. It’s OK to start small and grow. Participants have found the FedNow Service provides them with significant control when rolling out their instant payment offerings. Many started by enabling a certain segment of customers to make instant payments, then expanded to other segments. Others started by focusing on a limited number of use cases or by only allowing instant payments during certain hours. From there, they expanded as they gained experience. Note: It’s important to understand how your customers want to use instant payments to determine where to start before expanding over time.
4. Around-the-clock staffing isn’t necessarily needed. Instant payment transaction processes are automated — either through a financial institution’s service provider or the financial institution’s own technology. The transparency and automation of instant payments reduce customer inquiries and the need for manual intervention.
5. It can be easier to reconcile than other faster payment services. Because payments made with the FedNow Service are immediate, there’s no lag in settlement time versus other faster payment services that may take a day or two to clear and settle.
6. You’ll want to ask correspondents and service providers what reports will be available. Financial institutions that use a correspondent or other service providers to settle instant payments told us that it’s important to ask these third parties what reports they will provide and when.
7. Make sure service providers can support your instant payment plans. Many FedNow Service participants use service providers such as payment processors, mobile banking platform providers and more to implement and support instant payments. Participants have shared with us the importance of ensuring that financial institutions’ instant payment goals and business objectives are supported by the service provider(s).

These lessons are just a few examples of what participants have learned from the first year of the FedNow Service. For more details on each of these lessons, visit FedNowExplorer.org.