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Instant Payments: The FedNow Service

Ready or not, here comes the FedNow℠ Service! With this instant payments solution on the horizon, there are lots of working pieces to understand and preparations to make. Vizo Financial has pulled together important information and resources to help you get acquainted with the FedNow Service. Think of this as your hub of knowledge to learn more about the next big thing in instant payments!

About the FedNow℠ Service

The FedNow℠ Service is the newest solution to join the real time/instant payments rail. Other payments rails include ACH, cards (debit/credit), cryptocurrency, cash, checks, etc. The instant payments rail works by initiating and settling payments within seconds through a technology-driven back-end process.

The FedNow Service runs through the Federal Reserve to provide safe and efficient instant payment services 24/7/365 and will give consumers and businesses the opportunity to handle transactions instantaneously so that they go from sender to recipient in near real-time.

Transactions through the FedNow Service will happen in just a few simple steps. From initiating the payment to notifying the financial institutions involved and confirming the funds transfer, the entire process works in just a matter of seconds.

Payments through the FedNow Service include:

  • Person-to-person (P2P)
  • Account-to-account (A2A)
  • Bill pay
  • Consumer to government
  • Business to consumer
  • Business to business
  • Business to government
  • Government to consumer

Credit unions are eligible to utilize the FedNow Service through a variety of participation types and connection options. One of those connection options is Vizo Financial, as we are set to serve as a correspondent provider for the FedNow Service.

Vizo Financial Service Provider

Vizo Financial is currently participating in the FedNow Service pilot program. As such, we have learned so much about the FedNow Service and how we can connect credit unions to this new instant payments solution. You can find our profile in the FedNow Service Provider Showcase!

Once the FedNow Service launches in 2023, Vizo Financial will serve as a correspondent provider. That means we can provide all member credit unions, clients of MY CU Services and the entire credit union industry with a connection to access the FedNow Service.

We will support all payment methods requested by our member credit unions and clients, which may include, but are not limited to A2A, P2P, bill payment, loan payments, other consumer payments, transfers and settlement services. This will allow us to ultimately provide end user support to consumers, businesses and financial institutions.

Vizo Financial will work with all credit unions, regardless of core processor, to help them meet their payment operations needs. In addition, we will be utilizing our payments platform partner to integrate and support credit unions with testing and implementation of the FedNow Service.

Want to plan ahead for working with Vizo Financial? Get started with the FedNow Service Readiness Roadmap. We can’t wait to help your credit union access the power of instant payments through the FedNow Service!

The FedNow Service vs. RTP

You may be wondering how the FedNow Service will compare to the already established Real Time Payments (RTP®) instant payments solution.

The truth is, they are very similar in many respects – they both offer instantaneous transactions 24/7/365, enabling consumers, businesses and other agencies to make payments happen almost at the click of a button. Convenient, right?

However, there are a few marked differences between the FedNow Service and RTP:

RTP FedNow Service
Run by The Clearing House Product of the Federal Reserve
Transactions facilitated through an institution’s official RTP account Transactions will run directly through the FedLine network
Transaction limit of $1 million Transaction limit of $500,000 (at launch)

FedNow FAQs

Have questions about the FedNow Service? The Federal Reserve has prepared some FAQs to address the many inquiries your credit union may have about the FedNow Service.

Instant Payments in General

Federal Reserve Actions to Support Instant Payments

Key Policy Considerations of the FedNow Service

Features and Functionality of the FedNow Service

Instant Payments Fraud and Security

As with any payments rail, the FedNow℠ Service comes with its own fraud and security concerns. The Federal Reserve has procedures in place for credit unions to address and even help prevent such issues. Here’s what your credit union needs to know:

Can limits be set for instant payments?

Yes, the sending institution can implement transaction limits. The default transaction limit is $100,000. You can increase or decrease this limit based on your institution’s risk, but the current maximum transaction limit, as set by the Fed, is $500,000. These limits can only be determined by the sending institution.

Can financial institutions report fraud?

Yes, in fact, any suspicion of fraud through the FedNow Service requires notification to the FedNow network. FedNow Service fraud reporting can be done via ISO messages or CSV files. More specifics about fraud reporting are detailed in the FedNow Service Operating Procedures.

How would you dispute an instant payment transaction or file a fraud dispute?

Transactions through the instant payments rail are irrevocable, given that settlement is instantaneous. Financial institutions can initiate a request for return to the receiving institution; however, since the transactions are irrevocable, the receiving financial institution does not have to return the funds. FRB Operating Circular 8 requires all participants to use reasonable efforts to aid in incident investigations and remediate exceptions.

If you are a receiving institution and funds are sent and subsequently found to be fraud, how is the fraud case managed? What are the timing requirements?

Non-value messages can be exchanged through the FedNow network, including request for return messages. Timing to report possible fraud to the FedNow network is the next cycle date after the fraud determination is made.

A "negative list" is mentioned in the FedNow Service procedures. Is there a way for a member to dispute being placed on the "negative list"?

Each financial institution will maintain their own negative list. The Federal Reserve is working on possible information sharing for the future, but only between sending/receiving institutions and the FedNow network. A member would have to work with their financial institution to reassess their placement on the negative list.

Regarding the negative list, if we are sending on behalf of a member, but the receiving institution has blocked the receipt, will we be notified that the transaction was blocked and why?

Yes, the receiving financial institution will reject the message, indicating to the sending financial institution that fraud controls were the reason for the rejection.

If you have any questions related to the FedNow services, please contact a corporate account manager by e-mail at