The Research Project
Starting in the fall of 2022, CU*Answers began studying the evolving world of payment processing, specifically the RTP© Network (The ClearingHouse) and FedNowSM (Federal Reserve) programs, and third-party partners who may be able to help us hook into these systems in order to receive funds for our credit unions on behalf of their members. Our goal was to understand the scope of potential projects, who we could partner with to connect, technical details about how the process works, and potential implications for fraud management.
For details about our RTP project, review the separate recipe.
Remember that these are payment options in addition to regular ACH. Whatever we do with these new payment channels will have no effect on our current ACH processes and functionality.
Status update as of August 18, 2023: Starting this month the Fed finally opened up the ability for us to start working with them on the development for our direct connection between CU*BASE and the Fed. Agreements have been signed and we have started the technical planning for hooking into this network. Our champion credit union is Frankenmuth CU.
Q: Will this project be in phases, like what you are doing with RTP?
A: Yes. Our first phase will allow CUs to jump on the FedNow rail and receive deposits to member accounts. After that we’ll tackle the Send and Request for Payment (RfP) functions, which, like RTP, will require a great deal more controls and fraud mitigation components.
Q: My corporate credit union said that they can hook us up to FedNow. Are you going to be working with corporates on this?
A: Our plan is to go directly to the Fed and complete all components of the project – Receive, Send, and Request for Payment – before we open the door to working directly with any particular corporate CU’s solution. Remember that unlike RTP, which you can hook to without changing your existing relationship with your corporate credit union, FedNow will require a greater level of entanglement with the corporate. Our plan is intended to allow everyone across the entire network to tap into FedNow without having to alter their existing corporate CU relationship.