Instant Payments Pilot Opportunity

In case you missed it, ICBA recently announced a partnership with Pidgin, a company that provides best-in-class faster payments capabilities.

The partnership is aimed at supporting community banks on their instant payments journeys, while ensuring they have the options and solutions they need to be competitive as instant payments accelerate in the market.

While usage and volume levels continue to mature--over 900 financial institutions were participating in the FedNow service as of mid-August 2024--and that number continues to climb at a rapid clip. As time goes on, participation and the delivery of customer-facing solutions will become increasingly important.

If your community bank is still trying to determine how to leverage an instant payments solution to deliver value to your retail and business customers, let us know if you are interested in participating in our pilot program with our new enablement partner, Pidgin.

The pilot program will be focused on proving out and exploring the following for community banks:

Instant Payments Connectivity and Participation: The FedNow and RTP networks both support a range of connectivity and participation options. For example, banks can choose to connect and process directly with the networks, or use a third-party service provider. For third-party service providers, most of the major core providers offer solutions, or banks can turn to a range of other providers, such as Pidgin. All of these third-party service providers require core integration, and once implementing 'send', will require digital channel integration as well.

Implementing 'Send': The vast majority of community banks connected to instant payments are currently still in receive-only mode. Receive-only is an excellent first step on your instant payments roadmap, but eventually community banks will be required to start sending to remain competitive. As part of the pilot, we will further explore the send participation type with community banks. This will include further exploring the operational and risk-related considerations with sending and how to extend the capabilities to customers.

Deploying Community Bank Focused Use Cases: There are an endless number of use cases that have been highlighted in the industry as examples of where instant payments can add value. However, in conjunction with the pilot, we'd like to explore and market use cases that really resonate with community banks.

Making the Business Case for Instant Payments: Most community banks (and businesses) are still in the assessment phase of determining how they will best monetize and bring value to their customers with instant payments long term. In conjunction with the pilot, we look forward to further exploring these dynamics.

Findings and learnings from the pilot program will be leveraged to support other community banks with their instant payment implementation efforts.

For questions or to take the next step in getting started with the pilot program, please email nick.denning@icba.org.