Real-time payments are changing the way money moves within the U.S. With payments processed securely, efficiently, and instantly, this can be a game-changer for both consumers and businesses. However, to implement real-time payments on a national scale, there are challenges that must be overcome, such as the need for a solid infrastructure.

During a recent PaymentsJournal podcast, Nick Botha, Global Payments Sales Manager/Sales Lead at AutoRek and Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research, discussed the benefits of adopting real-time payments, operational considerations, and what we can learn from the UK’s implementation.

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What Does FedNow Mean for Real-Time Payments in the US?

One of the biggest benefits of FedNow’s upcoming launch is that it will offer an instant payment option for both consumers and businesses. No longer will users have to wait – transfers  and settlements can take place within seconds. With other traditional payment options still experiencing delays and higher costs, FedNow will provide an innovative solution, helping the US modernize the payment environment.

“Having a government organization running real-time payments is going to be a bit of a game-changer in such a big market,” said Botha. “And with the number of benefits which FedNow has expressly defined, it eradicates the delay experienced by more traditional digital rails such as ACH transfers. One that’s more interesting to me and where we fit into the picture is that it creates new product offerings, encourages innovation, and creates competition.”Botha explains that there will be an effect on the U.S. market. However, how much of an effect will be based on the level of adoption. Adoption of real-time payments has been considerably lower in the U.S. than it has in India, Brazil, and the UK.

In the US, Botha believes that organizations and regulators will be testing and monitoring regularly to determine where this new solution will be adding the most value.

Operational Considerations for Navigating FedNow

Although many organizations are eager and ready to adopt FedNow for its numerous benefits, including adding a competitive edge in the global marketplace, Botha says there are a few operational considerations to keep in mind.

 “The most obvious one on the surface is: how is this going to affect existing infra...