Jack Henry Adds FedNow to Real-Time Payments Offerings

Jack Henry

Payments processor Jack Henry says it is “operationally ready” to support the Federal Reserve’s FedNow service.

FedNow is the U.S. central bank’s real-time payments network due to launch in July, and Jack Henry announced Monday (May 15) that more than 20 of its clients will take part in its supporting pilot and early adopter program.

“Today’s convenience-driven consumers and businesses expect to move money in the moment of need so real-time payments have evolved into competitive necessities,” Tede Forman, president of Jack Henry Payment Solutions, said in a news release.

He added the company wanted to help its clients update payment strategies and platforms that put them “at the center of the payment experience” while reducing payments friction and financial fragmentation.

The Federal Reserve had managed to avoid friction when setting up the program, Elspeth Bloodgood, senior advisory technical product manager at Jack Henry, said in an interview with PYMNTS last year.

“They would bring pieces forward one at a time, and then we would be able to respond to that and provide input on how that would impact community and regional financial institutions,” Bloodgood told PYMNTS.

Those regional institutions typically have more complex tech stacks, she noted, partially because of the size of the financial institution and an array of relationships with processors and correspondent banks.

Among the first companies using Jack Henry’s PayCenter on the FedNow network is the HawaiiUSA Federal Credit Union.

“We decided to be part of the program because we wanted to have input on how the instant payments rail was going to operate and ensure that the needs of financial institutions in Hawaii were being considered,” Scott Young, the credit union’s vice president of payments operation, said in the news release.

“FedNow will level the playing field and help us compete with the large financial institutions on the mainland.”

The news comes as two of the largest retailers in the country are making preparation for the launch of FedNow.

As PYMNTS wrote last week, Walmart has so far been more vocal about FedNow than rival Amazon.

At the Faster Payments Council’s 2023 Spring Member Meeting in March, Walmart Senior Director of Payments Matt Howarter discussed his company’s potential interest in the government-backed instant payment platform.

“Over 45 percent of calls to our call center are ‘Where is my refund?’” Howarter said during a panel discussion. “Faster payments present the perfect opportunity to be able to leverage the technology to improve that customer experience.”