Chargebacks911® COO Monica Eaton-Cardone’s Thoughts & Analysis for Multichannel Merchant
In her latest byline for Multichannel Merchant, Chargebacks911’s Monica Eaton-Cardone offers insight on the FedNow service, a new push for real-time payments in the US.
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Under the preexisting system, we conduct interbank payments using the automated clearinghouse (ACH) system. ACH clearing involves significant back-and-forth reconciliation of multiple different records. This slows down the process and, in turn, opens the door for errors in the reconciliation process.
The FedNow service combines real-time gross settlement (RTGS) and integrated payments clearing. The new system will help us catch up to advancements being made globally in payments technology.
“It’s been proposed that the main reason for slower adoption in the U.S. was the lack of a mandate,” Monica suggests. “If institutions aren’t forced to make moves in tech innovation, they often won’t sign onto new initiatives. After all, no one wants to be a guinea pig for an untested technology when there are trillions of dollars on the line.”
The introduction of FedNow, however, will benefit everyone.