CU Times: What’s a benefit of being so early to the payments game?

Mayes: I think the benefit for us was learning as we went. While it probably slowed us down in some cases in the fact that we’re going to make mistakes, we’re going to learn along the way, probably a little slower on some of the first folks that we brought on. We actually started with ourselves. Before we began to connect credit unions and others, we connected ourselves. Our CEO likes to call it ‘eating our own cooking.’ We can fail ourselves before we impact others.

We were ahead of the game as we learned some things faster than someone just getting started on the networks.

CU Times: What are some ways adopting immediate payments are benefiting credit unions and their business?

Mayes: Credit unions have daily operations that involve managing their financial transactions efficiently. They move money to handle various tasks, such as paying bills, processing loan disbursements and overseeing settlement funds. We have credit unions leveraging immediate payments for themselves and finding efficiencies in reconciliation by being able to hold money in an interest-bearing account longer before they need to send that out the door. Those are some of the things that credit unions directly benefit. However, those same lessons translate down to the members as well. The same benefits a credit union could get from that are seen in their membership, such as the ability to manage their cash and liquidity on their terms and their own time. They also have the ability to move money, like pulling money from wallets and immediately making that available to them to draw cash out of an ATM or to swipe their debit card to purchase something they may need. Those are use cases we're seeing from our credit unions connecting from day one.

CU Times: Speaking of use cases, what are some of the best use cases you’re seeing for your credit unions?

Mayes: The top three use cases for our credit unions that are receiving transactions today are Venmo, Square and DailyPay. Venmo is the use case of folks who have money sitting in a digital wallet and are bringing that back into their credit union to use. The Square use case is typically for a credit union's businesses. Maybe someone has a side gig or a tiny business that they're operating using the Square payment technology. Those accumulate in a wallet, and they essentially can draw that back down to their credit union instantly. Now that cash is available for them to use. And then DailyPay is that payroll or the earned wage access [use case]. An hourly employee can earn wages. Let's say they get paid on a two-week cycle. They can draw down against their earned wages between paychecks to cover expenses that have popped up and eliminate the need to go to a payday lender to close that gap. It gives them the ability to close that gap without those crazy interest rates. Those are the top three. We have about 80 credit unions that we've connected, and those are among the top three use cases across the board.

CU Times: Corporate One recommends that credit unions enable immediate payments on both rails. Have you seen credit unions follow this advice?

Mayes: I mentioned we've connected about 80 credit unions, and almost all of those who have signed up for FedNow have also signed up for RTP. If you look at the statistics, FedNow has over 1,200 financial institutions, and give-or-take is about 20%-25% credit unions. [The RTP network] is hovering around that 800 financial institution mark. The majority of institutions are crossing over regularly. Still, we encourage being on both rails, and I would say most of the credit unions we're working with are signing up for both.

CU Times: What are the unique fraud risks with payment rails, and how do you address them?

Mayes: Irrevocability is a bit unique to [immediate payments]. It's not all that dissimilar from a wire, but essentially, these are irrevocable, so that's certainly a concern you want to be aware of. Certainly, the 24/7 capability is something you'll want to be mindful of. A lot of times, credit unions may have manual processes in place for some hard legacy payments like ACH, which is more of a batch. You really reduce the ability to manually intervene in a process when you're talking about immediate payments because that stuff is moving so much quicker. But the risk itself is not different. You're still subject to potential authorized fraud issues like somebody giving away information they shouldn't be giving or being scammed by those romance scams. But [the FedNow Service and RTP network] are both push credit networks and push credit eliminates some of that potential debit with unauthorized pull-downs. You're all pushing money out the door with both of these rails, which changes the game a little bit. From what we see in some of the ACH fraud or maybe with a debit card, it's a little bit unique. I mean, it's nothing inherently different than what you're doing naturally anyway. You're informing your members and educating your members about the scams that are out there. You are making sure that you've got stop gaps and speed bumps along the way. You’ve got to make sure you've got strong multifactor authentication biometrics built into certain aspects. Multifactor authentication is a requirement of the rails. If you don't have that, you're not in the game.

CU Times: What are some questions or concerns credit unions have for Corporate One?

Mayes: There are a couple of things we often hear, like, ‘I've got a thousand other projects; where does this fit in?’ We all are faced with that. We're wearing a hundred thousand hats, but that's probably the number one thing that we hear is: ‘How do I find the time? It's one more thing I’ve got to manage.’ Then, there’s the operational concern. There's a liquidity management component to this because you're operating 24/7, so you've got to be able to manage and ensure your institution has liquidity available. And I would say the third major one we hear is the fraud concerns and the risk they perceive as happening. What we have learned over the years is that it's actually not that big of a deal to implement. We've really streamlined our process. It's down to around 45 business days to get someone up and running on the rails. It's not actually a huge lift. And I've got a million testimonials from various credit unions on my website that indicate [it’s not a huge lift]. Regarding the fraud piece we mentioned, the actual numbers are quite low. Even though the volume keeps increasing on both networks, the fraud has remained at about 0.1%.

CU Times: How much demand are you seeing from your credit unions, or credit unions in general, in sending immediate payments?

Mayes: I'm going to call it ‘starting the journey.’ I think what makes these rails sustainable is everyone getting to Send. We have, I would say, a half-dozen to a dozen credit unions talking about their use cases and figuring out what that means to them because it isn't just about opening the floodgates for anyone and everyone. You really want to talk about what makes sense for my membership. What are their needs? Where are they moving money today so that it could be more effective to move it in a different manner? They're at various stages. Some are focused on, how do I disperse my cash out to indirect dealers faster? How do I build that relationship tighter? Others have businesses that they're working with that say, 'Hey, I want to be able to manage my liquidity in a different way as a business.' I would say there's some traction. I wouldn't say everyone's storming the doors to move the needle, but you're relying on a user experience for some of that. You're waiting for your digital or mobile banking provider to give you an application with which you can move and facilitate these immediate payments. Some of it is like finding the balance between what the credit union wants to do and their UI [user interface] experience to help bring that together.

CU Times: What’s on the horizon as Corporate One sees it?

Mayes: We’re continuing down the path of connecting credit unions. But, starting to look on the horizon, that request-for-payment piece will come quickly. We think there are a lot of really good use cases for credit unions, specifically in the request-for-pay space and finding out what those are. How do we find partnerships to accelerate credit unions to, at a minimum, be able to receive these requests for payment? All it takes is one major retailer or one major subscription-type service to turn that on. And we're going to want to be at the table, right? And we want to make sure that we can keep credit unions at the table for any use case that may come down the road.