Payfinia, Inc., an independent payments company created last year within the digital banking company Tyfone, officially launched the Payfinia CUSO Wednesday.

Star One Credit Union ($9.7 billion, Sunnyvale, Calif.), a longtime Tyfone customer that partnered with the Portland, Ore.-based digital banking provider in 2023 to build the Instant Payment Xchange (IPX) solution, contributed $4.5 million in seed funding to the CUSO, according to Payfinia’s announcement.

Payfinia’s IPX solution is an open, payments-as-a-service (PaaS) framework for credit unions and industry partners that is certified to send and receive instant payments on the FedNow Service and includes embedded fraud controls.

In addition to making its $4.5 million investment, which helped form the CUSO and develop its product roadmap, Star One sent a series of $500,000 FedNow instant payment transactions to Payfinia’s business account at U.S. Bank via IPX’s direct integration with Tyfone’s nFinia Digital Banking Platform, settling each transaction in less than five seconds, Payfinia said. The new CUSO noted that during the instant payment message exchange between the nFinia platform and IPX, Payfinia instituted unique user controls to permit higher transaction limits.

“Star One is proud to support Payfinia and its vision of making instant payments accessible to all account holders in the U.S.,” Star One CEO Gary Rodrigues stated. “The IPX solution empowers our members to take control of their cash flow. So far, the IPX solution has displaced 25% of same-day ACH transactions, with 53% fewer fraud losses compared to same-day ACH and an 83% reduction in operational overhead for P2P payment networks.”

Keith Riddle, General Manager for the Payfinia CUSO, commented, “Limited resources, legacy systems, fraud mitigation and costs to implement new payment services are primary challenges that hinder community-based institutions from adopting instant payment capabilities. Payfinia is building an ecosystem that overcomes these limitations, enabling an open-provider approach that meets the diverse needs of community financial institutions. The IPX platform provides institutions with scalable, effective and affordable payment solutions.”

Payfinia added that it is partnering with a range of firms to embed instant payment capabilities within their digital experiences and accelerate use cases for consumers and businesses, including core processors, third-party digital platform providers and fintechs. What’s more, it said it is planning to integrate IPX platform capabilities with The Clearing House’s RTP network in early 2025.

Last week, Tyfone was named the Credit Union Times Luminary of the Year in the category of Third-Party Product Innovation – Mobile Banking.