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With the FedNow Service approaching the anniversary of its July 2023 launch, it's appropriate to reflect on how far we've come and what comes next with respect to instant payments and the FedNow Service, specifically.
Here at ICBA Payments, we spent much of 2022, and the first half of 2023 engaging with banks and trying to help them prepare for their instant payments journey. These efforts have proven to be time well spent, as hundreds of community banks have since gone live with instant payments, both on FedNow and The Clearing House's RTP network.
As of the beginning of June, there are approximately 800 financial institutions participating in the FedNow Service, which is very impressive adoption in under a year. Though overall volume and the number of sending institutions is still maturing, when taken in aggregate with RTP volume growth, instant payments are accelerating at a rapid clip.
While community banks are clearly moving into instant payments to ensure competitiveness in the marketplace, there are still thousands more community banks yet to participate, and those that are participating are still largely in a receive-only mode. Suffice it to say, this is only the beginning.
At our most recent ICBA LIVE convention in March, I moderated a Learning Lab entitled, "An Exploration in Powering Community Banks on Instant Payments", where I was joined by Pidgin CEO and founder, Abhishek Veeraghanta, and community bank executive, David Long, from Bryant Bank.
Abhishek and David were exceptional panelists and shared a wealth of information with attendees and a few notable themes, including:
the need for community banks to have a payments strategy
that instant payments are here to stay and participation is key, and
it’s not enough just to participate; you need to understand your customers’ journey, challenges and needs to best determine how payments can help solve pain points across all payment rails.
To that end, we invite you to join us in exploring ‘what comes next’ wherever you are in your payments journey. We are working with Pidgin, a best-in-class instant payments platform provider, to determine how community banks can be more successful with their FedNow and RTP rollouts, and we are committed to sharing our findings with the broader ICBA Payments client-base.
It’s not just about payment speed with instant payments; reducing risk, improving the customer experience, and modernizing payments systems are important benefits as well, and we hope you’ll join us in bringing these benefits to your customers and communities.
If you are interested in learning more about our instant payment pilot opportunities, or would simply like to talk through your journey, please let us know.