Federal Reserve officials have declined so far to disclose payments volume statistics for the government’s new instant payments system, FedNow, but service partners Visa and Jack Henry & Associates said this week that they’re seeing a rise in volume.

Speaking at the Nacha Smarter Faster Payments conference in Miami Wednesday, executives of those companies described the increases they’re seeing during a panel on “Navigating Payments Interoperability.”

The payment network Visa and financial technology provider Jack Henry are both among 30 certified FedNow service providers listed on the Federal Reserve’s website detailing FedNow’s market participants. Other certified service providers include the big processors Fiserv and Fidelity National Information Services, as well as fintechs, such as Finzly and Open Payment Network.

While Jack Henry is certified across four FedNow participation types, including sending, receiving, receive request-for-payment and liquidity management transfer, Visa is certified in only the first two categories.

During the first week of April, Jack Henry had as much in transaction volume on FedNow as it did for the entire fourth-quarter of last year, said Elspeth Bloodgood, the Monett, Missouri-based company’s senior manager of product management.

“In one week in April, we did, almost dollar-for-dollar, the transaction volume of a quarter in 2023,” Bloodgood said during the panel discussion. For now, that’s mainly driven by large players in the market, but it’s expected that small businesses and consumers will join in later this year as more use cases arrive, she said.

While the overall FedNow volume may not be as high as some people would like, it’s moving “in the right direction,” she said.

The Federal Reserve launched FedNow last July and has been courting banks and credit unions in a campaign to have them hook up to the system. So far, about 700 of the nearly 10,000 U.S. financial institutions have signed up. The Fed expects about 8,000 will ultimately join the system.

Only financial institutions can connect to the FedNow system, and those banks and credit unions, in turn, can offer real-time payments services to consumers and businesses.

San Francisco-based Visa is also seeing a rise in FedNow volume. “On the receive side, yes, we’ve seen the volume go up significantly each and every month,” said Karen Cervenka, Visa’s vice president overseeing RTP and open banking in North America.

With respect to new senders that come on board, it’s evident how they’re impacting volume. She said that Visa’s system can see “large jumps in volume” when some new financial institutions become senders, and as they add clients. “As they bring on new clients, you see it instantly,” Cervenka said.

Bloodgood recommended that financial institutions sign up to at least receive payments through the FedNow system. Sending capabilities have more complexity, particularly with respect to liquidity management, she noted, so she suggested institutions considering that option be “very confident” they’re prepared for the step and have risk mitigation precautions in place.


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