By Mark Keeling, Catalyst Senior Manager, Payments Strategy & Product Innovation
Welcome to a new blog series on the FedNow® Service. These blogs are intended to inform, prepare and enhance your knowledge of instant payment basics and other topics, such as: new features and functionality, credit union use cases, member education, fraud mitigation and more. This inaugural post will cover choosing the right FedNow partner for your journey into the faster payments' world.
The FedNow Service is approaching its first anniversary and has almost 900 financial
institutions live online, a significant growth for the new payment rail. By year end, Catalyst anticipates the number to top 1,400. So, while your credit union may not have been an early adopter, you can still join this exciting service with the assistance of Catalyst as your trusted partner.
When choosing any partner or vendor, it’s important to understand and trust that they know what they are doing. While the FedNow Service may seem “new” to many of us, Catalyst has been working on this project since 2015. We have a solid team of faster payments experts that participate in many industry workgroups, councils, associations, Federal Reserve user groups and the U.S. Faster Payments council. Catalyst often takes a leadership role in creating and growing this new payment rail and is nationally seen as a frontline partner for the FedNow Service.
When it comes to the nuts and bolts of establishing the service, Catalyst is here to make it happen with limited strain on your staff. We currently have developed multiple interfaces to many core providers, such as Corelation and Jack Henry Symitar, plus third-party mobile and online payment platforms. We are agnostic and will work with any provider in the industry, allowing you to choose “best of breed” providers.
The onboarding and implementation process
Onboarding and implementation of this holistic solution is led by a proven process with our experienced team. We will explain the Federal Reserve paperwork, the procedure for initiating the FedNow Service and generate the documents to be signed by your authorized personnel. During our kick-off we will walk your team through the steps and clearly define any information your credit union will need to provide during setup. Next, is connecting to your core and setting up the new service, followed by testing and roll-out.
Settlement through the FedNow Service
Another decision point of finding the right partner is settlement. Catalyst continues to work tirelessly to improve the ease of managing the FedNow Service transactions through our user-friendly portal, CatalystPay. The workflow is simple and straightforward. Since transactions automatically post, there is no need for a day two suspense account like with unposted ACH transactions.
These new instant transactions are posted into a sub account, which segregates these real-time items from the remaining transaction types settling in your Catalyst account. Unlike others in the market, we allow same-day transactions to post until 11:30 p.m. CT, extending your interest window. This makes reconciliation much easier for your institution.
Leveraging your Catalyst relationship enables us to manage your liquidity 24/7/365. Along with your good funds balances we will also include available line of credit, which will become more important as you choose your “send” rollout plan.
Your Catalyst team is here to help. Stay in the know with all things faster payments with the FedNow Service Essentials webinar series, now available on-demand. For more information on partnering with Catalyst for the FedNow Service, visit catalystcorp.org/fast.