Financial software applications and marketplaces provider Finastra has completed testing and certification for the FedNow Service, the Federal Reserve’s instant payment service. Launching in July 2023, the new instant payment service is set to be integrated into Finastra’s Payments To Go and will later be added to its Global PAYplus solution, enabling US-based financial institutions (Fis) with instant payment capabilities on the cloud.

Finastra and what the FedNow Service certification entails Based on the information provided in the announcement, Finastra’s cloud-based payments processing solution Payments To Go, together with its Total Messaging gateway, offers the connectivity, availability, agility, and scale needed for banks to provide instant payment services at all times. With Finastra’s certified connection to the FedNow Service, Fis can offer instant payments in an easy and expedited manner. As it is delivered via an open API, business customers can access the FedNow Service via an intuitive portal, enabling them to initiate payments and submit payment requests easily.

Barry Rodrigues, EVP of Finastra’s Payments Business Unit stated that Finastra has looked to help Fis stay ahead of market developments as consumers and businesses alike expect instant payments to be the norm. The spokesperson believes the FedNow Service to enable new avenues for better customer experiences and unlock revenue-generating opportunities that are thought of as critical for Fis’ success throughout the country. As Finastra has been activating within the instant payments space worldwide, being named a FedNow-certified payments provider is set to enable the company to equip its customers with the new tool to succeed in the time to come.

With Finastra’s participation in the FedNow pilot programme, which supports the development, testing, and adoption of the service, its customers are allowed to be among the first FIs to go live in a quick and efficient manner once the service launches in summer 2023. Aite-Novarica Group research, supported by Finastra, showcases that instant payments are an important growth and innovation area within the commercial banking space, yet 76% of respondents indicated that legacy payment systems are an obstacle to rolling out such services.  Cloud implementations, and particularly Payments-as-a-Service (PaaS) solutions, ‘level the playing field’ of accessibility to new payment tech, with 91% of banks either finalising a transition of payments processing to the cloud or having plans to do so. Erika Baumann, Director of Commercial Banking and Payments at Aite-Novarica Group stated that PaaS solutions and payments hubs are key to the success of community banks, credit unions, and other Fis as they work to remain competitive against larger banks and fintechs.

The spokesperson believes it important for Fis to modernise their payment systems to meet customer demand for access to expedited payments, accelerate their time to market, and help reduce their risks, together with overall operational costs. .