The recommendations outline practices to support effective and widespread industry implementation of instant payments
The Federal Reserve today released market practices to advance standardized implementation of the request for payment (RFP) feature of instant payments. RFP has the potential to be a powerful tool that financial institutions and service providers can use to build instant bill pay services to help their customers better manage cash flow.
The RFP market practices were developed by an industry work group convened by the Federal Reserve with diverse industry representation. The recommendations are intended to serve as market practices that foster standard and effective RFP implementation across the industry and promote a strong and consistent customer experience.
“In working with a wide range of clients on RFP solutions, we understand consistent user experiences are crucial to driving more adoption,” said Alberto Casas, senior vice president at U.S. Bank. “Standardizing customer enrollment and end-to-end experiences will help drive the scale that is needed for RFP to be a widely used payment feature in the future. Importantly, the work group’s recommendations will also help create consistency needed to increase participation from more banks and credit unions.”
The work group’s market practices focus on a single, significant RFP use case: consumer-to-business (C2B) bill payments, though some practices developed for this use case may also apply to other RFP use cases.
“We believe that this collective effort is going to benefit the entire payments ecosystem,” said Nick Stanescu, FedNow Service business executive and senior vice president of Federal Reserve Financial Services. “More than 90 organizations, from fintechs to banks to merchants, took part in the work group, reflecting the widespread commitment to address common challenges with an agreed-upon approach to execution.”
The market practices are detailed, tactical, and immediately applicable for financial institutions and their service providers that are ready to offer RFP to customers. Billers, merchants and other industry participants will also find them relevant, given the growing uptake of instant payments. Highlights include:
- Recommendations on enrolling and enabling billers and customers to send and receive RFPs
- Specific criteria for populating and presenting clear request for payment messages
- Options of useful data passed back to the biller
“Delivering great customer experiences requires reducing friction in the bill payments process,” said John Brady, chief architect of BillGO. “BillGO was thrilled to help draft these important recommendations, because we know receiving and paying bills instantly through RFP will enable seamless and convenient bill pay experiences for consumers everywhere. This valuable and much-needed guidance will spur the industry to embrace and enhance instant payment usage.”
As a result of industry feedback, today the Federal Reserve also updated the FedNow Service Operating Procedures to provide context related to RFP warranties. The updates include the meaning of legitimate purpose with respect to RFPs, guidance on the scope of the warranty provided when a financial institution sends an RFP, financial institution obligations for monitoring customer RFP use and investigating anomalous activity, and procedures for initiating claims related to alleged breaches of RFP warranties.
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