Payments Platform Form3 Wins FedNow Certification

Account-to-account payment platform Form3 says it is ready for FedNow.

The company on Thursday (July 27) announced it was among the first in its industry to finish testing and certification for the Federal Reserve’s new instant payment system, which launched last week.

“The launch of the FedNow Service marks a significant step forward in the U.S. payments landscape, providing substantial benefits for consumers and businesses, such as rapid access to funds and managing cash flows,” Form3 said in a news release.

To become certified, Form3 met the requirements of the FedNow testing program and affirmed it is ready to meet the requirements to operate in an instant, round-the-clock payments environment. Form3 has been a part of the FedNow Service Pilot Program since last July.

The company said its payment technology platform is available to help early adopter banks and FinTechs connect to FedNow.

In a recent interview with PYMNTS, Miriam Sheril, head of product – U.S. at Form3, stressed that FedNow’s success depends on its adoption by banks — thousands of them.

“To drive a network, you need ubiquity, and it’s hard to achieve when there’s a chicken and egg situation,” she said.

What she means is this: Banks may be waiting to see whether new use cases and consumer demand appear before signing on. However, the consumer demand and use cases could be slow to materialize unless they see that their banks have the functionality in place.

Meanwhile, PYMNTS’ Karen Webster wrote last week that for FedNow to scale, its early adopters will have to see quick success.

“Igniting a new payments network requires volume and scale — and how quickly that happens is vital,” Webster wrote. “Having early adopters connect is one thing, but having them transact is another, … If that takes too long for whatever the reason, early adopters will lose interest — and the traction necessary to create the network effects that drive scale will slow.”

Another challenge, she added, is a lack of interoperability between FedNow and the Real Time Payments (RTP) network. For now, there’s no way for a bank to originate a real-time payment on one rail and a bank not connected to that same rail to receive it.