Now that the Federal Reserve has decided the jump into the real-time payments market as a provider, tech companies offering integration services and overlay products will be an interesting market to watch. They will now want to build solutions not only for The Clearing House RTP platform, but also the Fed’s developing FedNow service.
The integrators will provide the tools for financial institutions to access or connect to one or both of the real-time payment solutions. The overlay providers will be the tech providers to build and support products that ride the real-time rails like a Request-for-Pay functionality and user experience.
The traditional core providers and the big payment solutions providers will certainly be offering theses services, as will many of the fintech players including Dwolla.
Here’s PaymentsSource’s take on recent events in real-time payments and Dwolla’s latest strategy:
Three years ago, payments technology provider Dwolla submitted a 164-page proposal to the Federal Reserve’s Faster Payments Task Force. This week, the Fed unveiled a plan for its own faster payments system, but Dwolla had already moved on to other projects.
Ironically, having left the competition, the Des Moines, Iowa-based company now stands ready to benefit from expanded Federal Reserve payments offerings
We’ll be here to implement faster payments systems as they are ready,” Dwolla CEO Ben Milne said. “I’m really excited to see the Fed taking a stance.”
In a period of about eight years, Dwolla has transformed from a mobile wallet concept used in small businesses and coffee shops, to one developing the FiSync protocol for banks to more easily embrace faster payments rails, and then to another pivot into B2B payments.
“I’m not sure any payment platform will be successful without integration to Fed services that are in demand,” Milne said. “We integrate with various Fed services today and will continue to do so in the future.”
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group