As its launch is set to evolve instant payments in the US, the FedNow has laid out frameworks as it looks to provide scale to drive adoption across the US.
Central to the plans is standardising the customer experience and enabling innovation to elevate from financial institutions in order to boost the overall payment infrastructure in the US.
For businesses across the US, the service has been touted as key for many companies looking to decrease costs as it taps into automation and reduces bank settlement risks, at a time when it’s crucial for firms to engage with the most efficient payment journeys.
The work group’s market practices take aim at a single, significant RFP (request for payment) use case: consumer-to-business (C2B) bill payments, though some practices developed for this use case may also apply to other RFP use cases.
As a result of industry feedback, the Federal Reserve updated the FedNow Service Operating Procedures to provide context related to RFP warranties.
The updates look to ensure improvement of the service and the meaning of legitimate purpose with respect to RFPs. As well as this, it provides guidance on the scope of the warranty provided when a financial institution sends an RFP, financial institution obligations for monitoring customer RFP use, and investigating anomalous activity.
Nick Stanescu, FedNow Service business executive and SVP of Federal Reserve Financial Services, commented: “We believe that this collective effort is going to benefit the entire payments ecosystem.
“More than 90 organisations, from fintechs to banks to merchants, took part in the work group, reflecting the widespread commitment to address common challenges with an agreed-upon approach to execution.”
The plans also allow consumers to deepen their engagement with RFPs, as they look to streamline the payment process in a boost for consumers and businesses. The guidance also seeks to secure privacy when it comes to data sharing.
John Brady, Chief Architect of BillGO, said: “Delivering great customer experiences requires reducing friction in the bill payments process.
“BillGO was thrilled to help draft these important recommendations, because we know receiving and paying bills instantly through RFP will enable seamless and convenient bill pay experiences for consumers everywhere. This valuable and much-needed guidance will spur the industry to embrace and enhance instant payment usage.”