September 9, 2024
Explore the Many Benefits of Instant Payments for Credit Unions
In today’s financial world, you are bound to hear about Instant Payments, but what are they, and how can they benefit credit unions? An “Instant Payment” is exactly what it sounds like; a person can make a financial transfer that becomes “instantly” available in the payee’s account.
As this form of payment grows in popularity, more and more financial institutions are signing on with providers of Instant Payments to provide customers with not only what they want, but also what they now expect. Even the Federal Reserve has embraced Instant Payments, having launched FedNow. Many consumers consider access to real-time payments a criterion when selecting a financial institution.
Benefits for Your Credit Union
While capabilities may vary depending on which Instant Payments provider you choose, there are many benefits to implementing this offering. As a Sharetec credit union, you can integrate directly with Open Payment Network (OPN), which is interoperable with TCH-RTP & FedNow, and offer, receive, send, and request for payment to members.
Avoid the Higher Costs of Other Payments
Credit cards come with interchange costs, and wires are also costly. By leveraging instant payments, your credit union can save money (including labor costs for needing more staff involvement with wires).
Fraud controls
All FIs are vulnerable to fraud, including credit unions – in 2022, the Voice Intelligence & Security Report found that credit union fraud rates had increased 70+% that year. So, naturally, fraud elimination, reduction, and mitigation risks are imperative to implement. With an Instant Payments program, your credit union can rest assured when it comes to fraud, as you will be able to implement controls based on cumulative value and velocity parameters. The system will further learn to detect fraudulent events based on historical activity.
Customization on Limitations
Instant Payment providers, like OPN, offer credit unions flexibility when it comes to setting limits on the amounts that can go out at the RTM level. There are capabilities to change the limit for specific members and to determine who gets access to instant payments (and what their limits will be). Your credit union will have full capabilities from the management console and can ultimately control what members you turn settings on for.
Data and Reporting
Your Instant Payments should provide tools to support data analytics and reporting in a Rich Data Format (RDF), to support large amounts of structured and unstructured data for each transaction.
Improve Member Acquisition and Retention
Members are looking for an Instant Payments solution, and by adopting one, your members are less likely to seek out another FI. You can accept more deposits, be seen as more relevant, and provide members with what they’re asking for before it’s too late. You’ll also boost your competitive advantage, as you’ll now have more capabilities than most FIs and as much as leading national banks and credit unions.
API with Workflow
Employees can experience improved work efficiency with communication protocols for accessing information and transactional processing.
Benefits for Your Members
Many of your members’ benefits align with those your credit union will experience. The most noteworthy benefit to your membership, however, is convenience.
Members can instantly pay their bills, hit last-minute deadlines, get their employees paid, and make instant payments. When banking with a Sharetec credit union, members will not need to download a separate app to make an instant payment. OPN provides Sharetec with an API that Sharetec has used to integrate instant payments directly into the Digital Banking experience. This makes the process easy for credit unions and even easier for members.
24/7/365 Availability
Not all payments, including ACH and wires, are 24/7/365. Instant payments are, though, including holidays, weekends, and nights.
Instant Payments for Everyday Use
Members can make payments anytime, anywhere. When it comes to paying bills, members with access to instant payments can send and receive funds instantly.
Instant Payments for Business
With instant payments, you can increase employee satisfaction by implementing payroll on demand. Receiving invoice payments and accessing funds immediately can strengthen cashflow.
Sharetec and Open Payment Network
As a believer in providing customers with the boldest technology possible, Sharetec was on the search for an Instant Payments provider that would accelerate customers’ growth. OPN was a natural choice, as it was ranked #1 overall by McKinsey & Company against the industries’ Faster Payments Effectiveness Criteria.
With OPN, Sharetec receives a direct connection to both RTP and FedNow. The RTP Certification ensures 24/7 uptime with redundant data centers being in active-active mode. FedNow Certification provides 24/7 uptime, security and encryption, fraud control adherence, and more. With interoperability, there is the ability to design and build the technology to do smart routing, reporting, and reconciliation.
Contact your Sharetec Account Relationship Manager or schedule a demo to learn more about this affordable solution that will provide your members with a seamless, efficient Instant Payments experience.