Seeking relevance

Given Star One’s Silicon Valley location, Gupta recognizes that her members are tech-savvy. However, given FedNow’s intuitive interface, she doesn’t see digital sophistication as a prerequisite for adoption.

“We know that our competitors aren’t other credit unions,” she says. “We see that our members engage with the Bank of Americas and Chases of the world, so we have to provide innovative solutions to stay relevant.”

Jamie Payton, president/CEO at Heritage South Credit Union in Sylacauga, Ala., voices a similar belief. “If you’re going to be a player, you have to stay at the front edge of the technology. It can be a dangerous place, but it’s the place that makes you available to your membership.”

With $175 million in assets, Heritage South is poised to be the smallest credit union to date to enable FedNow. The initial wave of adopters all had $1 billion or more in assets.

The decision to pursue instant payments grew out of the strategic planning process, Payton says. “We saw it as a way to stay ahead of the curve.”

Heritage South planned to roll out FedNow and RTP in November, both on a receive-only basis, through Corporate America Credit Union, which will shoulder much of the off-hours administration.

Payton envisions particular member upside in merchant settlement, insurance distributions, and “getting paid at the end of a shift rather than the end of a workweek.”

The product’s visibility will be mostly through digital channels, but Payton doesn’t view that as an impediment. “We used to think it was for younger members, but we now see digital activity across the board,” including older generations, she says.

Heritage South’s enthusiasm is hardly an outlier.

“There’s been a tremendous ‘hockey stick’ of interest—which is what we expected, but it’s still good to see,” says Brad Ganey, chief operating officer at Catalyst. “We transitioned from educational webinars to ‘here’s what it takes to go live’ in a hurry.”

While processing 30 million check items monthly for more than 3,000 credit unions, Catalyst is keen to balance its portfolio for future payment types as well.

“The 24/7/365 aspect of real-time payments, with all the data that comes along with it, is a no-brainer,” Ganey says. “We believe this will change the way U.S. commerce is conducted.”

The primary pain point is core integration, he adds. That’s why Catalyst emphasized broad enablement.

Ganey envisions an instant payments use case that should particularly resonate with credit unions. “Indirect auto loans are big for credit unions. Dealerships want their payments as quickly as possible, so this is a natural fit.”

NEXT: Lessons in connectivity