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However, challenges such as interoperability and fraud must be addressed to fully unlock the potential of faster payments. Overcoming cost and interoperability hurdles through innovative solutions will be key to sustaining this momentum and delivering on the promise of faster payments.
Kirstin spoke openly with our membership, addressing questions coming in from our members on topics such as ubiquity, interoperability, and industry collaboration. We were thrilled to have upwards of 100 of our members on the line to hear directly from Kirstin Wells, principal economist at the Federal Reserve Board.
Waiting for the Fed — and its promise of interoperability, which requires participation from the private sector — is akin to playing the (very) long game. This pilot program uses routed requests for payment using a Zelle social alias or traditional account information to make bill payments sent, settled, posted and confirmed in real time.
Billings noted that corporate clients are also interested in the data that real-time payments can provide across a multitude of payment types, spanning requests for payments, remittances and other transactions. The “now,” according to the panelists, demands interoperability between rails, which is an eventuality.
The rail was built on the ISO 20022 messaging standard, which sends data and payments together. The ability to send a request for payment via RTP can help smooth reconciliation, he noted. . Leveraging requests for payment could really help in those situations.” .
Spearheaded by the FPC Real-Time Recurring Work Group (RTRWG), sponsored by BNY Mellon , the new report delves into key components essential for the successful deployment of instant recurring payments. For those reasons, the FPC urges all system participants to adopt the recommendations in this report.”
Interoperability FedNow intends to work seamlessly with other payment networks. It will connect banks and credit unions of all sizes, ensuring everyone can send and receive payments easily. FedNow will also offer tools to help participants deal with any payment inquiries they might have.
Mastercard’s Malhotra said that as the card networks work, “we actually make these payments process within the blink of an eye.” But speed is not enough, he added, as payment rails also need to include better data and widespread availability around the clock and interoperability that can support open use cases.
FedNow works by offering banks, credit unions, and other organizations such as retailers a system where they can utilize instant payment services that go through this core process: The payer (e.g. an employer paying an employee their wages) uses an app provided by their credit union to request the desired payment.
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