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Instant Payments: The FedNow Service

The FedNow® Service is here! With this instant payment solution now available, there are lots of avenues to explore for your credit union: Do you want to send or receive only, or both? How will you connect to the service? How will you settle?

Your credit union’s instant payments journey is just beginning, and Vizo Financial is here to help you get started. This is your hub of knowledge for all things FedNow Service and instant payments related!

About the FedNow Service

The FedNow Service is the newest solution to join the real time/instant payments rail. 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 happen in just a few simple steps. From initiating the payment to notifying the financial institutions and confirming the funds transfer, the entire process works in just a matter of seconds.

Possible payment types through the FedNow Service include:

  • Person-to-person (P2P)
  • Account-to-account (A2A)
  • Consumer to government (C2G)
  • Business to consumer (B2C)
  • Business to business (B2B)
  • Business to government (B2G)
  • Government to consumer (G2C)
  • Consumer to Business (C2B)
  • Government to Business (G2B)
  • Government to Government (G2G)

Credit unions are eligible to utilize the FedNow Service through a variety of connectivity profiles. One of those connection options is Vizo Financial and MY CU Services, as we are set up to serve as a correspondent provider for the FedNow Service.

Vizo Financial as a Correspondent

To support activities for financial institutions participating in the FedNow Service, Vizo Financial completed a multi-step consumer testing and certification program in the months leading up to the launch. As early adopters, we are one of a diverse range of service providers in the U.S.

Vizo Financial is currently certified to offer settlement for FedNow Service instant payments. In addition, we are able to provide receiving capabilities with send capabilities coming in the near future.

As the credit union’s correspondent, Vizo Financial 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.

Vizo Financial is ready to work with all credit unions, regardless of core processor, to help them meet their payment operations needs. In addition, we’re utilizing our payments service provider and platform partner to integrate with their core processors and support credit unions with implementation of Instant Payment services via the FedNow Service.

Settlement Services

The option gives the credit union the opportunity to settle instant payment transactions at the Corporate acting as the credit union’s correspondent.

Credit unions will be able to access settlement information via our EFT platform in Zephyr, our online member access network. All instant payments activity through the FedNow Service will be listed under the Instant Pay Manager. Here, credit unions will see itemized payments posting to their settlement account or their Instant Payments subaccount at the Corporate.

Through these settlement services, your credit union can take advantage of our connection to the Federal Reserve so you don’t have to add the burden of 24/7 account monitoring. Let us do that on your behalf to save you time and resources.

Receive-Only Services

This participation type allows credit unions to receive payments.

Using the interface between the credit union’s core processor and the Corporate’s payments service provider, the credit union will be able to receive instant payments via the FedNow Service, facilitating payment posting within seconds.

Credit unions will be able to access payment information relating to received credit transfers via our EFT platform. The information will be accessible through the Instant Pay Manger.

Instant payment transactions will arrive at the Corporate’s payments service provider– the connection point – from the Federal Reserve. The payments service provider will then route the posting to the credit union’s core processor.

The posting will automatically occur via the core interface and go to MY CU Services’ payments service provider, so the payment will post to the member’s account with instant funds availability.

The FedNow Service vs. RTP

You may be wondering how the FedNow Service compares to the 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)
Payment system timeout — 15 seconds Payment system timeout — 20 seconds

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.

Limits can also be assessed by home and online banking vendors, as well as mobile application vendors.

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.

The Participant Negative List is mentioned in the FedNow Service procedures. Is there a way for a member to dispute being placed on the Participant Negative List?

Each financial institution can maintain their own participant negative list or have third party manage their participant negative list for them. 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 participant 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 Service, or you're interested in learning about connecting to the service through Vizo Financial, please contact a corporate account manager by e-mail at