Wells Fargo set for FedNow pilot testing

Issues for instant payments for corporates still need to be addressed

by | May 12, 2021 | bobsguide

Wells Fargo is ready to pilot the Federal Reserve’s new instant payments service, FedNow, which is expected to launch in 2023.

Speaking at this year’s Finovate Spring, Braden More, executive vice president and head of partnerships and industry relations at Wells Fargo said he hopes the testing will encourage smaller institutions to join the faster payments network when it’s launched.

“At Wells Fargo, we’re engaged with the Federal Reserve and we are excited about being a pilot participant, as the Fed set about doing some of the piloting work, in fact our experts in risk, in settlements, in systems, in networks are all involved in trying to bring this to fruition.”

Earlier this year, the central bank announced it was taking a “phased approach” to expedite the launch of its payments service and more than 110 participants will join the pilot program to ensure its market ready.

While real time payments for consumers has progressed, the issues facing faster payments for corporates still need to be addressed, according to Braden More.

“You’ve got this issue with corporates, who sent out a tremendous amount of B2B funds and B2C funds, where they’ve got to go back into their ERP systems, because those systems don’t know how to send a real time payment quite yet. You’ve got to go back and do real work, getting the banks isn’t enough, you’ve actually got to go back to the people that are originating payments, and enable them to request Zelle payment, Real Time Payment (RTP) or FedNow payment.”

More said regulators have been a “catalyst” for innovation in the payments industry.

“I give credit to the regulators for challenging the industry, particularly when you have so many banks in the US that makes it a little bit different than other markets around the world that have been able to catalyse a little bit more quickly. The regulators really played a role in challenging the industry to rise-up to the occasion and you’ve seen us respond in all these different ways.”

 

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