The ever changing landscape of payments is about to be shaken once again. The federal reserve bank is launching FedNow in July after years of development. The new instant payments system will provide payments in seconds around the clock and on weekends and Holidays. Mega retailers Kroger and Walmart are interest in harnessing the power of the Fed Now instant payment system to provide their customers with alternatives to traditional cards. Merchants have been trying to rid themselves of interchange fees forever and this could be a cheaper and faster option for payments than what is currently available, but just because Fed Now will be launched, that doesn't mean that the financial institutions have built out these experiences for their customers. This will take time to be implemented correctly at the point of sale and financial institutions will have to integrate FedNow into their system to offer to their customers. Real time payments would benefit retailers not only at the point of sale for their customers, but in relaying customer payments such as refunds. Faster payments mean faster cash flow and in turn a better refund process.
Like any other industry change, we will follow closely to see how this process unfolds and will keep you informed on everything that is happening. July is just around the corner but we expect the rollout and adoption of FedNow by financial institutions to be somewhat slow. For more information on how you can process payments and offer your customers a better choice, contact us today.