Is it comparable to Venmo or Zelle?
In some ways, yes, as these are instant payment systems like The FedNow Service. However, where they differ is that Venmo and Zelle are primarily P2P, or Person-to-Person type of transactions. The FedNow Service will have more use cases than just P2P. The FedNow Service was developed by the Federal Reserve Bank with input from a Pilot group which consisted of banks and credit unions of various sizes, and several service providers.
Why was it important for HawaiiUSA to offer instant payment services to members?
We were chosen as one of the 120 Pilot organizations two years ago at the beginning. We thought it was important to be part of the development process of this new instant payment system for our membership and to make sure that the needs of the Hawaii financial institutions were being heard. Being in the middle of the Pacific, with one of the last time zones in the world brings unique needs and challenges. We were looking for a solution that would enable members to move money to and from our Credit Union faster, and help solve for some of the challenges we face, especially those unique to us as a Hawaiian financial institution. The FedNow Service has ultimately been a good fit and helps us meet our goal to be a full-service choice for our members.
How can HawaiiUSA member use FedNow for faster payments?
Currently HawaiiUSA can RECEIVE The FedNow Service transactions. This means that if a member is receiving funds from another financial institution participating in The FedNow Service (such as the US Treasury), their funds will be available instantly in their HawaiiUSA account. We hope to offer SEND functionality from HawaiiUSA accounts to other accounts in the future.
Will the service be compatible only with financial institutions also participating?
Yes, only financial institutions that are on The FedNow Service network can send or receive The FedNow Service transactions.
Unlike Venmo or other services, are these transactions federally insured?
The transactions are irrevocable, meaning once they are sent, they’re sent. However, once the funds are in the financial institution’s account, they are insured under FDIC or NCUA up to $250,000.
Debunking myths. The FedNow Service:
- is NOT a cryptocurrency system and does NOT use blockchain technology
- is NOT connected to digital currency
- US Digital Currency (USDC) is NOT part of The FedNow Service and is completely unrelated
- Central Bank Digital Currency (CBDC) is NOT connected to The FedNow Service
- was NOT created to replace current, existing payments rails/systems, such as ACH or even RTP
- is NOT more vulnerable to fraud than any other payment method
