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The U.S Faster Payments Council has released fresh guidelines to help financial institutions add send capabilities to their instant-payments functions, a component just as critical as the ability to receive fast transfers.
Among the pieces of the “Guideline.02: Operational Considerations for Instant Payments Send-Side Primer” are items explaining the instant-payment send flow, elements to keep in mind for the user interface, real-time reconciliation, staffing, fraud mitigation, and compliance programs, among others.
Why is the sending end of instant payments important? Not as many banks and credit unions have enabled send as have adopted receive, with only between 30% and 40% of FIs expected to enable sending instant credits by 2028, according to an October report from the U.S. Faster Payments Council. In comparison, in the survey of 25 core banking providers and payments processors, between 70% and 80% of all Fis will be enabled to receive by 2028.
The send side is very much a focus for RTP, the real-time payments network started in 2017 by The Clearing House Payments Co. LLC.
“What we’re trying to do is build a two-sided network,” Jim Colassano, senior vice president for RTP Business Product Management, tells Digital Transactions News. “We spent the first five years of the network existed just building up that network. Once we built that up to scale, then we started to focus on the origination side.”
As RTP’s volume, especially for receiving, increases, more FIs begin to consider the expediency of adding send capabilities, he says. “We have more than 900 banks that are receiving transactions,” Colassano says. Of them, 90% are community banks and credit unions. Earlier this month, RTP noted its volume was near 1 million daily transactions, and in December it raised its real-time transaction cap from $1 million to $10 million.
It’s not just RTP that is experiencing growth in real-time payments. FedNow, the instant payment service from the Federal Reserve had 336,487 transactions in the third quarter of 2024, good for $17.5 billion in value. FedNow, launched in July 2023 with 35 banks and credit unions, grew to 400 a year ago, and now counts almost 1,200 participating FIs.
On its Web site, FedNow lists benefits of adding send capability, including more revenue-generation opportunities, such as from new loans, and the possibility of converting small-dollar wire payments to instant payments.
Adding instant payments send requires creating a user interface for the institution’s clients to create the payment transaction, says Colassano. That’s it, however, as RTP has partnered with bank-technology providers to integrate all of RTP’s services. “We have a lot of experience with the technology providers so they know what’s needed to be done to implement send capability.”
