Faster Payments Council Says Proper Planning Key to Implementing Instant Payments

Financial institutions that are looking to implement instant payments send capabilities must consider liquidity management, reconciliation processes, fraud mitigation, compliance and other critical factors, the U.S. Faster Payments Council said in a newly published industry resource.

Titled “Operational Considerations for Instant Payments Send-Side Guidelines,” the resource shares best practices and detailed guidance for financial institutions, the organization said in a Thursday (Sept. 25) press release.

“Without proper planning, institutions risk inefficiencies, increased operational costs, and potential accountholder dissatisfaction,” the resource said.

The resource was produced by the FPC’s Operational Considerations Work Group, according to the press release.

Its guidelines cover operational factors financial institutions must address when enabling send-side functionality; business continuity, staffing and training considerations; the critical role of account holder education and disclosures; and interoperability and routing considerations for financial institutions using both the RTP® network and the FedNow® Service, per the release.

“The OCWG Work Group has produced deliverables that are both substantial and practical,” Miriam Sheril, head of product — US at Form3 and chair of the FPC OCWG, said in the release. “This specific deliverable focuses on helping banks get ready to send payments, with rich detail supported by clear guidelines that make it easy to read and apply for specific purposes.”

The FPC published another guide to help financial institutions get ready for real-time payments, “Operational Considerations for Receiving Instant Payments,” in September 2024.

It was reported in January that the FPC found that 90% of financial institutions believed that customers would benefit from instant payments, but only 65% thought that customers would actually adopt these methods if they were offered.

The PYMNTS Intelligence and The Clearing House collaboration “Overcoming Obstacles to Widespread Real-Time Payments Adoption” found that many financial institutions remain reluctant to embrace real-time rails, citing concerns about the costs of upgrading legacy systems, potential fraud risks and misconceptions regarding customer demand.

A major obstacle for banks in implementing real-time payment systems is the high cost and complexity of upgrading legacy infrastructure. According to the report, 34% of banks believe their core systems cannot manage the speed and volume required by real-time payments. Another 34% expressed concern about their systems’ ability to support 24/7 availability.