Embracing two-way connectivity: Why being receive-only on FedNow is a mistake in a digital strategy

July 2023 brought with it the exciting announcement by the Federal Reserve that its new and highly anticipated FedNow service went live. In keeping with today’s instant-gratification economy and culture, FedNow enables virtually any financial institution to take part and gain the ability to transfer money for their consumers instantly, 24/7/365.

The power of FedNow

This groundbreaking real-time gross settlement (RTGS) system by the Federal Reserve enables financial institutions to process and settle instant payments around the clock, revolutionizing the U.S. payment landscape. The system’s ability to provide instantaneous transaction processing offers unprecedented opportunities for financial institutions to enhance customer experiences and drive digital innovation.

The more financial institutions participate, the greater the benefits they and their consumers can realize. This same premise applies to the extent to which financial institutions participate. Currently, some financial institutions are engaging with FedNow with a “receive-only” service. These financial institutions cannot initiate payments for their consumers except to return payments. They also cannot send requests for payment (RFPs). However, they can send and receive financial institution credit transfers to help manage liquidity for instant payments.

The pitfalls of being receive-only

While this minimal level of participation in the FedNow system is certainly better than failing to take advantage altogether, Neural Payments sees this option as misguided and urges financial institutions to adopt a two-way connectivity approach with FedNow as a part of a comprehensive digital strategy to create a truly seamless experience. Relying solely on receive capabilities limits financial institutions’ ability to actively participate and engage in real-time payment ecosystems, putting them at a disadvantage in several ways:

Incomplete customer experience

By being receive-only on FedNow, financial institutions miss out on the opportunity to provide their customers with robust, real-time, end-to-end payment experiences. In today’s fast-paced digital world, customers expect seamless, instantaneous transactions in both sending and receiving payments. Failing to offer the ability to send real-time payments can undermine customer satisfaction and hinder customer retention efforts.

Missed revenue opportunities

A receive-only approach restricts financial institutions from capitalizing on the revenue potential that real-time payments bring. By only receiving payments, financial institutions miss out on transaction fees associated with sending instant payments. Moreover, it limits opportunities for financial institutions to monetize value-added services, such as expedited bill payments or innovative P2P payment solutions that rely on instantaneous fund transfers.

Stifled innovation

Being receive-only on FedNow also hampers the financial institution’s ability to drive digital innovation and develop new payment products and services – a critical consideration in today’s financial services environment. With a two-way approach, institutions can fully leverage real-time payment capabilities within the development or implementation of innovative solutions that cater to evolving customer needs. This advanced capability also fosters a culture of continuous improvement and positions financial institutions as pioneers among consumers.

Competitive disadvantage

Consumers have a choice – and when financial institutions are unable to send instant payments, their consumers will likely seek out more advanced, digitally-driven banking experiences elsewhere. With approximately 60% of young adults reporting they would switch financial institutions for an improved digital banking experience, Neural Payments warns that these consumers would reasonably apply this same thinking to capabilities like those offered by FedNow. For this reason, financial institutions that limit themselves to a receive-only approach will fall behind competitors that embrace the full potential of FedNow and fintech companies that offer real-time payment capabilities.


In an era when digital transformation is reshaping the banking industry, financial institutions must embrace a comprehensive digital strategy that includes two-way connectivity with the Federal Reserve’s FedNow system. While receiving instant payments is a step forward, it falls short of harnessing the full potential of real-time payments.

At Neural Payments, our experience shows us that consumers reward financial institutions that provide greater capabilities. By actively participating in real-time payment ecosystems and enabling both sending and receiving capabilities, financial institutions can provide enhanced consumer experiences, gain a competitive edge, unlock new revenue streams, and foster innovation. Embracing the full power of FedNow helps institutions position themselves as leaders in just the latest development of the digital banking revolution.

Mick Oppy

Mick Oppy

Mick Oppy is a Payment Innovator, MIT graduate and former Vice President at Worldpay/FIS over product development for Banks and Credit Unions. Mick is the visionary for Neural Payments, ... Web: neuralpayments.com Details