Finastra has completed testing and certification for the Federal Reserve’s FedNow service. Learn how this will enable financial institutions to offer secure and efficient immediate payment services across the US.
Finastra, a leading global provider of financial software applications and marketplaces, has finished testing and certification for the service ahead of the Federal Reserve’s FedNow debut in July 2023. FedNow, which has been in development for years, will offer an instant payment service with the goal of giving financial institutions all over the US a secure and effective rapid payment service.
Finastra plans to incorporate FedNow into its Payments To Go service, ultimately integrating it into Global PAYplus. This offers cloud-based fast payment capabilities to financial institutions around the US. Banks will be able to offer immediate payment services around-the-clock by integrating Payments To Go with Finastra’s Total Messaging Gateway. Finastra’s certified link to the FedNow Service streamlines the rate at which all financial institutions can offer fast payments.
The FedNow Service was developed with corporate clients’ accessibility in mind and uses an open API. In order to make payments and submit payment requests, users can make use of an easy-to-use interface.
Adding Payments To Go
Amarillo National Bank, situated in Texas, is one of the first financial institutions to use Finastra’s Payments To Go for FedNow services. Amarillo National Bank’s senior vice president and CFO, Ross Kerns, expressed his excitement about soon being able to provide customers with FedNow’s advantages. Finastra’s Payments To Go solution was the one we chose because we believed it would help us improve customer service and promote our innovation agenda. We appreciate how Finastra’s partners help us achieve and surpass our corporate goals.
“As consumers and businesses today take rapid payments for granted, Finastra has always placed a premium on enabling financial institutions to remain ahead of market trends. Barry Rodrigues, EVP of Finastra’s Payments Business Unit, stated that the FedNow Service “enables new avenues for elevated customer experiences and unlocks revenue-generating opportunities that are critical to the success of institutions across the country.”
We are happy to be a FedNow certified provider and look forward to providing our customers with this new tool so they can be successful for years to come. “With our many years of experience innovating in the instant payments space across the globe, we are pleased to be a FedNow certified provider.”
Using FedNow for the first time
Finastra’s involvement in the FedNow pilot program enables its clients to be among the first financial institutions to go live promptly and effectively when the service is introduced this summer. The program aids in the creation, testing, and acceptance of the service.
“Finastra’s inclusion in the FedNow pilot, and now its early certification, is helping us stay a step ahead of the competition, giving us an edge as we wait for the official launch of the new payment rail,” said Joseph T. Baptista Jr., president and CEO of Mechanics Cooperative Bank.
Our team felt strongly about adopting an agile and cloud-based payments center, so we turned to our trusted colleagues at Finastra for assistance in achieving our objectives in the payments sector. As we prepare to use the service, we look forward to working closely with Finastra over the upcoming months.
Services for instant payments are the wave of the future. However, according to Aite-Novarica Group research backed by Finastra, 76% of firms believe that the deployment of legacy payment systems is a barrier to quick payments.
However, the study found that 91% of banks are thinking about moving their payment processing to the cloud. They are doing this because Payments-as-a-Service (PaaS) and cloud deployments make payment solutions more accessible.
“Payments as a Service solutions and payments hubs, being much more accessible than ever before, are key to the success of community banks, credit unions, and other financial institutions as they work to remain competitive against the larger banks and fintechs,” stated Erika Baumann, director, commercial banking and payments at Aite-Novarica Group.
In order to meet customer demand for access to speedier payments, accelerate time to market, and contribute to risk reduction and lower overall operational costs, financial institutions must upgrade their payment systems.