Credit unions can lead in creating ease, accessibility with this instant payment option set to launch in late July.
Payment systems are evolving at an exciting pace and in a way that will help shape the future of financial services in the U.S. Businesses and consumers have been looking for faster, more efficient payment options for years, and for good reason. For consumers, the ability to send a payment any time of the day or night, 365 days a year and verify that it’s received instantly can help simplify household finances and provide peace of mind. For businesses, the ability to settle invoices immediately can help ease vital cash flow needs. While real-time payments already exist in the U.S. today, they’re used primarily by large banks for only 1.4% of all U.S. transactions. Now we’re on the doorstep of making instant payments more accessible and expanding that ease and simplicity to businesses of all sizes and everyday consumers across the U.S.
Veridian Credit Union is Iowa’s second-largest credit union. We were founded in Waterloo, Iowa, in 1934. Today, we’re owned by the 325,000 members we serve with $7 billion in assets and 30 branches across Iowa and eastern Nebraska. Our mission is to partner with our members to create successful financial futures. Our growth strategy is focused on both our branch network and digital delivery—because we know people want instant, digital access to financial products and services as well as the option to talk face-to-face with a person when needed. Instant payments are in perfect alignment with our mission, our growth strategy and the future of financial services. That’s why we chose to complete formal testing and receive certification to become an early adopter of the instant payments infrastructure offered by FedNow.
Getting Certified for FedNow
We first began exploring Veridian CU’s readiness for instant payments in 2020. Those conversations solidified our commitment to offer both real-time payments through The Clearing House and instant payments through FedNow. We joined the FedNow pilot program later that year and worked with Alacriti, our payments processing partner and a CUES Supplier member, to build our connection to FedNow’s infrastructure, designate users and verify test cases. In June of this year, we learned that we had earned FedNow certification.
FedNow’s launch later this month (July 2023) will be a milestone event for the future of financial services. The use cases and benefits for making instant payments more accessible are endless and evolving. Here at Veridian CU, we’ll launch with “receive only” first, and we’re eager to add the ability for our members to send and request instant payments in the coming months.
In addition to the convenience and efficiency for our members and business partners, we look forward to applying the same benefits within our operations. Using instant payments for things like loan payoffs and closing costs will increase efficiency in loan processing. We’ll also explore the potential uses and benefits to our member application and onboarding processes. Overall, instant payments will equip us to offer an improved experience for Veridian CU members in a wide variety of interactions. We know that businesses and consumers have been waiting for this day. We’ve been hearing their requests for faster payment options, and we’re proud that Veridian CU’s 325,000 members will be among the first to benefit from instant payments.
Credit unions were founded on the need to make financial services more accessible. In this case, creating more accessibility to faster payments hinges on more financial institutions signing on to FedNow for instant payments, to The Clearing House for real-time payments or, like Veridian CU, both. Our team welcomes the opportunity to talk with any credit union considering their next steps in payment systems.
CUES member Renee Christoffer, president/CEO of $7 billion Veridian Credit Union, Waterloo, Iowa.