The Federal Reserve this week announced its pilot for real-time payment services and its major competitor said it will work with the Fed to ensure the two solutions are interoperable.

When the Federal Reserve first announced FedNow back in August 2019, The Clearing House, which offers a similar solution called the real-time payment (RTP) network, stated the program would slow adoption of real-time payments in the banking industry.

Instead, adoption has actually increased in the past year, thanks to third-party partners who helped integrate TCH’s solution with banks, said Steve Ledford, TCH product executive for the RTP network. Currently, the company has 95 financial institutions on its RTP network and reaches 57% of U.S. demand deposit accounts.

Ledford told Bank Automation News that TCH is also in talks with the Federal Reserve to ensure the two solutions will use similar messaging formats so there’s interoperability between the systems.

TCH’s system launched in 2017, and counts $2.7 trillion JPMorgan Chase, $1.9 trillion Wells Fargo and $469.6 billion Bank of New York Mellon as members of the platform.

More than 110 organizations, including some of the nation’s biggest banks, will participate in the Federal Reserve pilot project, FedNow, including JPMorgan Chase, Wells Fargo, Bank of New York Mellon, $2.8 trillion Citibank and $421.6 billion Capital One Financial. Smaller banks, credit unions and payment vendors are also on the list of participating financial institutions.

Due to industry interest, the FedNow pilot is more extensive than originally planned, according to the Federal Reserve. The end goal is to develop a system that will support payments in near real time, regardless of the FI’s size or geographic location. The Fed’s system will use the FedLine network, which includes more than 10,000 FIs directly through their agents, according to a 2019 statement announcing the service. Effectively, this allows FIs to enable their customers to send and receive funds instantly.

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