Jack Henry & Associates Inc., one of the earliest participants in the Federal Reserve’s nascent FedNow real-time payments platform, said early Monday it is “operationally ready” to support the service when it launches commercially in July.
The Monett, Mo.-based processor said more than 20 client institutions are set to connect to an “early adopter” program for FedNow, including Bryant Bank in Alabama and HawaiiUSA Federal Credit Union. The latter institution was a participant in the Fed’s pilot program for FedNow.
The banks and credit unions Jack Henry named Monday, which will connect to FedNow through a platform called JHA PayCenter, represent an early indication that the Fed’s real-time network will extend beyond the nation’s largest financial institutions. Jack Henry says it developed JHA PayCenter specifically to connect clients to real-time services that came into being before FedNow, including Early Warning Services LLC’s Zelle network and The Clearing House Payments Co.’s RTP service. The same platform, the company says, will now serve to connect clients to FedNow.
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In a relatively short time, such services have become crucial as financial institutions look to attract business and consumer payments. Both the RTP network and Zelle were launched in 2017. “Real-time payments have evolved into competitive necessities,” Tede Forman, president of Jack Henry Payment Solutions, said in a statement. “Based on the high and growing demand for instant payments, and the fact that more than half of all U.S. [demand-deposit] accounts are now connected to a faster-payments network, banks and credit unions simply can’t compete without offering real-time payments and meaningful use cases.”
The Fed says it has sought out processors to help financial institutions, particularly those with modest technical resources, link to the new network. “Processors play an important role in enabling the FedNow service for many financial institutions,” said Ken Montgomery, first vice president at Bank of Boston and FedNow’s service program executive, in a statement related to the Jack Henry announcement.
Jack Henry named Bryant Bank, based in Tuscaloosa, Ala., and with 18 branches in that state, and HawaiiUSA Federal Credit Union as among the initial participants to link to FedNow via the JHA PayCenter.