Finance & Banking , Fraud Management & Cybercrime , Industry Specific

As FedNow Marks First Year, FIs Need to Show More Enthusiasm

As the FedNow instant payment platform celebrates its one-year anniversary, Peter Tapling, board member of the U.S. Faster Payments Council, doesn't understand why financial institutions aren't bringing out new products that incorporate faster payments.

See Also: Tackling Payment Screening Challenges Head On

"There is a lack of momentum, budget and motivation. It's frustrating to me when I hear banks say, 'My customers aren't asking for faster payments.' Of course, they're not," Tapling said. "They're not asking for instant clearing and settlement. They don't even know what that is."

Relatively few of the 800 banks that have adopted FedNow have enabled customers to send and receive money. But if financial services executives ever sat in a call center, they would hear customers expressing confusion and frustration over payment issues, asking why a payment they sent hadn't reached the recipient - even though the money has left the customer's bank account, he said.

"Those are payment problems that are solved by instant payments. They're solved by FedNow, but not in any one of those did the customer say, 'I would like to make an instant payment. So, financial institutions need to stop waiting for customers to ask them for an instant payment, and they need to start delivering on solving the payment problems that customers have."

In this video interview with Information Security Media Group, Tapling discussed:

• The challenges of adopting the real-time payments send option;
• The latest assessment of fraud in the FedNow network;
• The future outlook for faster payments and FedNow.

Tapling has more than 30 years of experience in product development, cloud computing, identity management and computer security. Prior to the U.S. Faster Payments Council, he was a technology adviser at Nacha. He is a member of the CyberEdBoard.