Advances in technology have changed your members’ expectations for speed and convenience. Today, everyone, including businesses, wants to send and receive money in an instant, and they’re turning to alternative payment services that can do just that. In fact, according to PYMNTS.com, 92% of consumers who received funds in or near real-time report they are very or extremely satisfied with real-time payments and 68% of businesses plan to adopt real-time payments in the next two years.

Corporate One is here to help our credit unions keep pace with the competition and satisfy member needs by providing the connections and services needed to use immediate payment platforms, such as The Clearing House’s (TCH) RTP^® network, and the Federal Reserve’s FedNow^R Service. 

Preparing for immediate payments implementation requires some planning, and it’s important to act now. If you haven’t already started your journey, here are four initial steps to help you get ready for real-time payments.

Step 1: Get to know immediate payments.

If you’re just getting started with immediate payments, you can gain a deeper understanding of how they work and the opportunities they provide by visiting Corporate One’s Real-Time Payments Info Center, FedNow Explorer , and TCH’s RTP pages , all of which have a wealth of information on the use cases and benefits of immediate payments. Each site allows you to explore the world of faster payments, evaluate immediate payment opportunities, and learn how you can embark on an instant payment transformation.

Once you have a baseline understanding of immediate payments, you can review the service offerings and capabilities of each rail. For example, the RTP^® Network Readiness Checklist for Banks and Credit Unions and the FedNow Service Readiness Guide  cover topics like payment flow, participant options, ISO^® 20022 message specifications, and more.

Step 2: Assess member behavior.

Even if your members aren’t asking about immediate payments directly, their behavior might provide an indication of their interest in these types of products. For example, do you know how much money your members have transferred from their accounts at your financial institution to an online payment provider like a digital wallet? Or how much of your small business customers’ account inflows are coming from these providers?

There are many ways to get a sense of your members’ payment behavior. For example, if your credit union uses FedACH® Services, a good place to start is the ACH Originated Entries Detail Report and the ACH Received Entries Detail Report available via the FedPayments Reporter Service for FedACH Services. These reports can help you assess the destination and source of your members’ money. You can gain an understanding of the current and future demand for immediate payments with this information.

Step 3: Evaluate needs and opportunities.

Once you understand the immediate payments landscape and your members’ behavior, you can start thinking about the many ways you can leverage these payments.

One area of focus should be on improving member experience. Instant credit transfers could make it easier for your members to move money, particularly to make more timely payments, solve transactional delays and transfer funds between accounts. In addition, notifications of payments received, and payments sent can put members’ minds at rest. Improving member experience makes it easier to stay competitive and retain and attract members.

Is there the potential to offer premium services? A bill presentment and bill pay service using real-time payments may be very attractive, particularly to your small and midsize business members who will then have the tools to transfer cash between accounts, send bills or invoices using request-for-payment capabilities, and streamline supplier payments and accounts payable/receivable reconciliation. A premium immediate payroll option could also be attractive for businesses to pay gig workers and offer timely employee payroll payments, which can set retail members apart from others.

And don’t forget that your financial institution can derive the same efficiencies and cash flow benefits as your business members. For example, you might consider leveraging instant payments to reimburse employee expenses, disburse 401(k) loans, or receive members’ loan payments.

Step 4: Begin conversations with key stakeholders.

Launching a new product takes time and planning, and real-time payments are no exception. As your financial institution prepares for 24/7/365 payments, share your ideas with internal stakeholders and external third-party vendors to understand what is feasible in the near and longer term.

If your financial institution is planning on partnering with a payment processor/aggregator, such as Corporate One, to offer immediate payments, now is the time to begin discussions with our team. With our current real-time payments service for the RTP network and our future offerings FedNow Service, credit unions can connect to both payment rails, manage their profiles, cash, and settlement; and make payments.  

Learn more

As your organization moves further along in its preparations, you will need to assess your systems and technology to understand the full impact of a real-time instant payments environment. For more information, I encourage you to reach out to me at 866/MyCorp1 or via tthomas@corporateone.coop to have a conversation about the next steps in your immediate payments journey.

Revised 5/20/2024