Accelerate Your Organization’s Readiness for Instant Payments

Wespay Advisors can help your organization:

• Understand how Instant Payments fit into your organization’s Treasury Management and payments offerings
• Identify Instant Payments use cases for your business and consumer account holders
• Evaluate staffing requirements in a 24x7x365 processing environment
• Implement Instant Payments fraud prevention and mitigation strategies
• Develop Instant Payments operational policies and procedures

• Building a customized Instant Payments plan for your organization that compliments your existing suite of payment services
• Assessing the effectiveness of your organization’s payment operations, fraud mitigation, and Treasury Management capabilities to ensure you’re prepared for the 24x7x365 Instant Payments environment
• Deploying payments SMEs to help augment your existing project staff to help you meet your in-process Instant Payments implementation project milestones
• Evaluation of your Instant Payment capabilities against industry sound practices and regulatory compliance requirements to improve operational efficiency, mitigate risk, grow revenue, and improve customer experience

What Are Instant Payments?

Instant Payments are payments that are done in near real-time. From the time you hit the send button on your smartphone or computer, the payment, including settlement, is posted to the receiver’s account within seconds. This differs from “faster payments”, which are typically posted same day or maybe within a couple of hours, but not instant.

What Are The Types of Instant Payments in the US?

 The Federal Reserve (FedNow) and The Clearing House (Real-Time Payments, RTP) are the two instant payment operators.

How Do Instant Payments Work?

Instant payments work much like many other credit-push payment systems and are almost identical to ACH when it comes to participants. The sender of the payment provides instructions in a payment message. Those instructions go through a financial institution and then to a centralized operator. The operator then sends those payment instructions to a receiving financial institution, which posts the transactions to the receiver’s account. It is important to note that there are no debits with instant payments. RTP and FedNow are both credit push models.

How Do Instant Payments Compare to ACH?

 ACH entries are done in a batch process. This is where several ACH transactions are bundled together, usually by type, such as business or consumer, etc., and sent through specific processing windows throughout the day and settled at specific times. Real-time payments are sent immediately as single payment messages and settled individually, also within seconds.  There is no waiting for a separate processing window. This is so you can get them to the receiving institution instantly and have them post to a receiver’s account, usually within seconds of being sent.

What Regulations Cover Instant Payments?

Real-time payments and FedNow are private networks, much like ACH. As such, just as Nacha has the ACH rules to govern automated clearing house payments, the Federal Reserve and The Clearing House have specific rules for FedNow and Real-Time Payments, respectively.  However, specific federal regulations, such as Regulation E and Regulation CC, have overarching governance for these payment systems.