Demystifying the Top 5 misconceptions about the FedNow service
The FedNow® Service, the first new payment rail introduced into the Federal Reserve system in over 40 years, is launching this summer. However, there remains a considerable amount of misinformation and misconceptions surrounding this new payment rail. In a recent webinar, Joni Hopkins, Vice President of the Product and Relationship Management Group at Federal Reserve Financial Services, and Mark Majeske, Senior Vice President of Faster Payments at Alacriti, addressed the top ten misconceptions prevalent in the market about the FedNow Service. Here, we will review five of the misconceptions discussed during the webinar, providing clarity and understanding for financial institutions and stakeholders.
Misconception #1:
My credit union has to offer both Send and Receive and all use cases to see a value.
Hopkins dispelled this misconception by emphasizing the flexibility of the FedNow platform. Credit unions have the autonomy to decide whether they want to offer Send and Receive capabilities or focus solely on Receive functionality. The recommendation is for every credit union to, at a minimum, explore the Receive Only option. This approach allows credit unions to gradually expand their offerings based on their members’ needs and preferences. Majeske shared that he’s seen a number of financial institutions start out with Receive Only and build to Send as they recognize what their members need and when they need it. It comes down to use cases and if members want to use something they’re seeing in the marketplace, like getting payroll faster.
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