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The long-awaited launch of the Federal Reserve's FedNow payment system is on the horizon, with a scheduled start date in July. Many credit unions and credit union-supporting organizations have been preparing for months for this new service, which will allow members to send and receive money immediately, no matter the day or time.
Officials with the Greensboro, N.C.-based corporate credit union Vizo Financial stated Thursday they have completed their testing and certification process for the FedNow Service and said the credit union "will be ready on day one."
To achieve certification, Vizo Financial partnered with with its service provider, Aptys Solutions LLC, and successfully tested the settlement side of the instant payment transactions.
FedNow will move funds directly and immediately between financial institution accounts in the U.S., initially supporting multiple use cases and serving as a platform banks and credit unions can leverage to develop innovative payments solutions that support evolving instant payment needs and additional use cases.
"Vizo Financial is proud to be one of the first in our industry to become certified for the FedNowSM Service settlement capability for send and receive capabilities," Jeff Stoner, SVP/chief technology and strategy officer, said. "The payments landscape is ever evolving, so we find it imperative to stay on the cutting-edge of payment services. We are excited to be able to help our member credit unions implement instant payments at their institutions. Vizo Financial and our payments CUSO, MY CU Services, are prepared and ready to help our member credit unions usher in this new instant payment service."
In May, the Monett, Mo.-based core processing and technology provider Jack Henry released its Strategic Priorities Benchmark Study that found more than 90% of bank and credit union executives said they plan to add new payments systems in the next two years. The overwhelming preference from credit unions (72%) was the FedNow Service. It was also the top choice among banks (60%).
"Consumers and businesses must wrangle with different user experiences, multiple settlement times and varying payment limits," the report said. "The challenge will be to streamline the payments experience in ways that reduce complexity and allow the consumer or business to choose who they want to pay — and how soon — without having to know or choose which method of payment is used on the backend to effect settlement."
Jack Henry said the July launch of FedNow will provide smaller financial institutions with an alternative instant-payments capability.
"Account-to-account transfers (A2A), also known as pay-by-bank, will also gain traction as merchants look for cheaper, faster ways to get paid in the downturn," it said.
Federal Reserve Bank of Boston Vice President and FedNow Service Program Executive Ken Montgomery said the certification process completed by Vizo Financial is incredibly important for financial institutions and their members and customers.
"We are excited that early adopters of all sizes across the country are making strides in their operational readiness for live transactions through the system," Montgomery said. "Completing certification is a key milestone for participating organizations to validate their ability to deliver instant payment services."
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
