First International Bank and Trust is expanding its real-time payments options to boost revenue and meet customer demand. 

The Wadford City, N.D.-based bank is adding real-time payments to its BaaS and payments arm, Kotapay, which offers instant payments for payrolls and bills, Trent Sorbe, chief payments officer at First International Bank and Trust (FIBT) and former FDIC bank examiner, told Bank Automation News at Money2020 on Oct. 28.

“BaaS is becoming closer to bread and butter” for regional banks, Sorbe said. “Everybody thinks about, ‘How can I expand my geographic reach without having to build expensive branches.’” 

Kotapay processes payroll for 2.5 million employees at 115,000 companies across the country, Sorbe said. Demand for instant payments is high with the bank’s customers.  

“We are always looking for sources of low-cost deposits in order to preserve net interest margin, which is a challenge for a community bank,” Sorbe said, noting that adding real-time payments could increase the $5.4 billion bank’s deposit base. 

FIBT will be onboarded on the FedNow network on Nov. 6 and will join The Clearing House’s real-time payments rail by the end of the month, Sorbe said. 

FIBT wants to join both payments rails because the banks on each network don’t overlap, Sorbe said. 

“You have to have access to both to have the broadest reach of banks that can accept a real-time payment,” which is essential for payroll disbursement, Sorbe said. “Typically, you’re going to find the smaller banks on FedNow, and the very large banks are going to be TCH capable.” 

Both payment rails use ISO 20022 messaging code and transmit payments in a similar fashion, Sorbe said, adding that big banks might show resistance to interoperability of the two rails, he said. 

 Register here for early-bird pricing for Bank Automation Summit U.S. 2025, taking place March 3-4 in Nashville, Tenn. View the full event agenda here.