As you adopt instant payments, your strategy should focus on receiving payments and efficiently sending them.  

The Faster Payments Council (FPC) recently released the Operational Considerations for Instant Payments Send-Side Primer guidelines, which Vice President of Advisory Services Nicole Payne and I contributed to. The guidelines provide essential operational components that will help your organization navigate the complexities of implementing and optimizing your immediate payment systems. 

Here are 10 actionable insights to guide your organization through the process: 

1. Instant Payment Send Flow and Error Resolution 

Instant payments offer real-time confirmation of success or failure. Since these payments are irrevocable, it's critical that you have robust error-resolution processes in place. Integration with return protocols, like FedNow® and RTP®, allows you to request returns, though receivers are not obligated to comply. This setup ensures smoother issue resolution and minimizes disruptions in the payment flow. 

2. Interoperability and Routing Considerations 

While full integration between FedNow and RTP is not yet available, routing models can bridge this gap and ensure seamless transactions. Pay attention to factors like transaction limits for FedNow ($500,000) and RTP ($10 million, effective on February 9, 2025), network fees and backup solutions, such as ACH or wire transfers, if both networks are unavailable. Being prepared for these contingencies will keep your operations running smoothly. 

3. User Experience and Interface Design 

A seamless user interface (UI) and user experience (UX) are vital for both consumers and your team members. Consumers expect real-time updates on their transactions. Your systems must be able to handle high transaction volumes while resolving issues quickly. Additionally, ensure that your mobile and web applications are ISO 20022 compliant to manage necessary data fields effectively. 

4. Liquidity Management 

Effective liquidity management is key to ensuring real-time settlement. FedNow allows the use of FRB master accounts for liquidity, while RTP requires prefunding in the prefunded balance account held at the Federal Reserve Bank of New York. Utilize tools like the RTP Management Portal and FedNow’s liquidity management transfer feature to monitor and manage liquidity, especially during off-hours and weekends, ensuring that you can settle transactions without delays. 

5. Real-Time Reconciliation 

Real-time reconciliation is essential for maintaining accurate financial records and reducing errors. Automating data synchronization with Enterprise Resource Planning (ERP) tools provides real-time visibility into your transactions and allows you to address discrepancies promptly. This helps maintain a high level of operational efficiency and ensures that all transactions are accounted for. 

6. Business Continuity and Resilience 

Ensuring business continuity is critical. You must have failover systems in place, ensure your staff is properly trained and maintain contingency plans for service interruptions or fraud. Regularly testing these plans ensures that you remain resilient in the face of system failures or disruptions, allowing you to maintain uninterrupted services. 

7. Staffing and Training 

Instant payments require specialized staffing and training, especially in areas like fraud prevention, IT and customer support. Make sure your team is prepared to handle issues such as payment errors and unauthorized transactions. Depending on your operational needs, consider extending support hours to accommodate 24/7 operations so consumers always receive timely assistance. 

8. Accountholder Education and Disclosures 

Educating consumers on the benefits, limitations and risks of instant payments will help them make informed decisions. Provide clear disclosures and create customized use cases to illustrate key features like transaction timing and fees. Additionally, ensure that your team members are trained to handle inquiries related to payment status, limits and potential issues. 

9. Fraud Mitigation 

Fraud prevention is a top priority. To mitigate risks, use tools like real-time fraud detection, transaction limits and digital profiling to identify suspicious activities. Payee validation and multi-factor authentication (MFA) should also be part of your security protocols to protect both your organization and consumers from unauthorized transactions. 

10. Compliance and Regulatory Considerations 

Ensure compliance with KYC, AML and transaction monitoring regulations. Adhere to guidelines from regulatory bodies such as the Consumer Financial Protection Bureau and refine your disclosures to cover risks, costs and security. This will help you meet legal requirements while maintaining trust and protection. 

Adopting instant payments involves comprehensive planning and implementing robust systems for liquidity management, fraud prevention, error resolution and compliance. You can also check out our Instant Payments Education Bundle for valuable insights on FedNow, RTP, and everything you need to navigate the world of instant payments. By focusing on these key areas, you can streamline your operations, improve the client experience and successfully navigate the challenges of a 24/7/365, real-time payments ecosystem. 

Republished with permission from EPCOR.