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Help Your Customers Get Paid Instantly with SHAZAM Faster Payments

Article contributor / Janet LaFrence / Faster Payments Program Manager

Faster payments are electronic payment services that provide funds to the payee within seconds or up to a few hours of initiation by the payer. These types of payments include:

  • Same Day ACH
  • Push to debit card, aka “funds transfer credit”
  • Push to account ("instant payments"), including:
    • The RTP® System, operated by The Clearing House® (TCH), since 2017
    • The FedNow® Service, operated by the Federal Reserve Bank, since 2023

SHAZAM’s Faster Payments program offers a variety of services to help financial institutions bring the benefits of faster payments to communities across the country. We introduced push to debit card (funds transfer credit) in 2015, which supports immediate availability of funds to the recipient cardholder, and we've supported Same Day ACH through our core platform and ACH origination service since it was first introduced in 2016.

For instant payments, SHAZAM recently announced general availability of the Federal Reserve’s FedNow Credit Receive processing service for all SHAZAM Core clients after a successful FedNow Service pilot program. This complements our existing RTP Credit Receive instant payments service from TCH, which has been available since January 2021.

The SHAZAM Core is certified to receive, decision and post instant payments received through our direct connections to both the RTP System and the FedNow Service. We’ll be expanding our faster payments capabilities to include the Nicola Core, instant payment initiation, and to serve financial institutions beyond the SHAZAM Core family, based on existing payment integrations to SHAZAM.

SHAZAM’s approach to faster payments is to leverage and expand our existing payment processing capabilities to support instant payments and to enhance the value of our existing products and services with instant payment features and related value-added services. As the landscape for faster payments evolves, our mission is to provide a “payments hub” capable of serving multiple target markets and use cases across all the faster payment channels.

Key Features of Instant Payments

Instant payments represent a new “payment rail” in the U.S. (message format is ISO 20022). They offer immediate funds availability to the payee and instant interbank settlement between participating financial institutions, 24/7, within seconds of payment initiation. Both RTP and FedNow allow large transaction limits, payments are credit push only, and single payments are processed one at a time.

Customer credit transfers are between deposit/share draft accounts at financial institutions that participate in each instant payments network. Interbank settlement between the participating financial institutions occurs in real-time between settlement accounts at the Federal Reserve. This is known as “real-time gross settlement” (previously only available for wire transfers).

It’s important to note that RTP and FedNow operate independently. Financial institutions that want to receive instant payments from accountholders at other RTP participant institutions must become RTP participants and enroll directly with TCH. Financial institutions that want to receive instant payments from accountholders at FedNow participant institutions must become FedNow participants and enroll directly with the Fed.

Financial institutions that want to bring the full benefits of instant payments to their accountholders should consider enrolling in both RTP and FedNow. SHAZAM can make that easy, with limited-time discounts available to institutions that opt to implement both at once.

Why Offer Faster Payments?

Consider implementing SHAZAM’s faster payments as part of your overall service offering, which will benefit your financial institution and your customers. In addition to meeting consumer demands for faster payment methods, instant payments can help your financial institution stay relevant with emerging payment innovations and improve customer service and retention, with minimal impact on your operations staff

Your customers will enjoy instant funds availability on payments received, 24/7, within seconds of payment initiation. The types of payments they might expect to receive include instant payroll deposits, instant transfers from a digital wallet or money management application, account-to-account transfers, disbursement of loan proceeds, payments on accounts receivable, and more. The use cases are expected to continue expanding as the market for instant payments evolves.

Please contact your SHAZAM regional director if you’d like to learn more about our faster payments services.