Jack Henry & Associates, Inc. (NASDAQ: JKHY), a leading provider of technology solutions and payment processing services primarily for the financial services industry, confirmed it will participate in the FedNowSM pilot program. Participating in the program provides the banks and credit unions that leverage JHA PayCenter™ to seamlessly connect to instant payment networks, more choices and interoperability for their faster payment offerings.
Jack Henry partnered with the Federal Reserve in early 2020 and will help shape the features and functions of the FedNow Service, provide input into the overall user experience, help ensure readiness for testing, and be among the first to process instant payments using the service before its general availability. In the initial advisory phase, participant input will help to further define the service and adoption roadmap, prepare for industry readiness, and finalize the Federal Reserve's overall instant payments strategy. The FedNow Service is expected to provide clearing and settlement functions by 2023.
Banks and credit unions currently have two ways to connect to faster payments networks - independently or through a partner like Jack Henry. Independent implementation requires significant capital and human resources to develop and maintain the connections between existing core and digital solutions and the new payment networks. Many financial institutions do not have the resident resources, expertise, or budget to effectively and efficiently support these complex development requirements. Partnering with Jack Henry eliminates the need for internal development, provides ongoing access to industry and technical experts, reduces the implementation period to 60 to 90 days, and significantly reduces near- and long-term costs.
Tede Forman, head of Consumer and Commercial Payments for Jack Henry, said, "JHA PayCenter is built on the vision to provide diverse financial institutions and their accountholders with seamless access to the industry's instant payment solutions. The FedNow Service will be another critical part of that vision and will leverage our ready-built infrastructure to provide banks and credit unions with frictionless access to faster payments networks. We look forward to the opportunity to help develop the functionality and practical use cases and to make material contributions to a service that will advance the evolving payments ecosystem."
For more information on the FedNow Pilot Program and the FedNow Service, visit FedNow.org