The U.S. Faster Payments Council (FPC) has taken a significant step in advancing efficient, secure instant payments in the United States by publishing an essential resource. Today, they unveiled “Guideline.01: Operational Considerations for Instant Payments Receive-Side Primer” in their Faster Payments Knowledge Center.
Developed in partnership with the FPC Operational Considerations for Instant & Immediate Payments Work Group (OCWG), sponsored by Form3, a leading cloud-native account-to-account platform, this guideline is designed to assist financial institutions in supporting instant payment rails.
The FPC’s Operational Considerations for Instant Payments Guideline.01 serves as an informative primer on the operational aspects of receiving instant payments. It offers high-level insights into the key considerations for adopting this innovative method of payment receipt. The primer is a valuable resource, providing financial institutions with a roadmap for embracing faster payments by highlighting critical areas for consideration.
“While the conversations around faster payments have been going on for a while, with the recent launch of the FedNow® Service to complement the TCH RTP® private sector solution – it’s clear that the tactical HOW do we do this, is becoming more and more of the conversation,” said Miriam Sheril, Head of Product – US at Form3 and FPC Operational Considerations Work Group Chair. “That’s why the OCWG was formed – to start pulling together information on how to actually think about operating a faster payment service specifically focused on those two new rails.”
As the first guideline in the series, the primer begins with an introduction to instant payments operations and sets the stage on how instant payments are transforming the U.S. payments ecosystem and challenging long-held payment processing paradigms. Topics covered in the primer include new message flows/processes in relation to existing payment flows, liquidity management, fraud mitigation, exception processing, staffing needs and training requirements, and more.
“With all the excitement around instant payments, the focus of the conversation is usually on topics like ubiquity, interoperability, and use cases, but there’s not as much around how to practically support a 24/7 instant payment rail and what financial institutions need to think about and prepare for from a back office perspective,” said Tony Cook, Executive Vice President – Payment Operations at FirstBank and Operational Considerations Work Group Vice Chair. “This is why our work group came together – to help financial institutions think through these challenges and get more comfortable stepping into instant payments.”
While more detail will be provided in the next guideline of this series around specific solutions and ways to address these areas, no two financial institutions are the same – therefore the problems shared, while universal, may not be solved in the same manner for each institution. Subsequent guideline series will cover the send side of instant payments as well as non-value messages (Request for Information, Request for Payment, Request for Refund).
“Our first guideline on operational considerations for instant payments lays the groundwork for addressing practical challenges in the industry,” said FPC Executive Director Reed Luhtanen. “FPC members are at the forefront of advancing faster payments, and this new guideline underscores our commitment to equipping financial institutions with the knowledge and resources required to embrace the era of instant payments.”
The FPC prioritizes inclusion of diverse perspectives in tackling complex topics such as interoperability, identifying real-world solutions that can ease adoption of faster payments, managing security risks and fraud threats, addressing barriers to financial inclusion and cross-border payments, and more, as the organization paves the way toward a future of faster payments for all.
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