Federal Reserve releases market practices for RFPs

Wednesday 27 September 2023 14:47 CET | News

Federal Reserve has released market practices to advance standardised implementation of the request for payment (RFP) feature of instant payments. 

As highlighted in the press release, RFP has the potential to be an important tool that financial institutions and service providers can use to build instant bill-pay services to help their customers better manage cash flow.   

The RFP market practices were developed by an industry work group convened by the Federal Reserve with diverse industry representation. The recommendations have been designed to function as market practices, aimed at facilitating the standard and effective implementation of RFPs across the industry and promoting a strong and consistent customer experience. 

The market practices established by the work group primarily centre around a single RFP application: consumer-to-business (C2B) bill payments. However, the press release also noted that certain practices developed for this specific use case may also have relevance and applicability in other RFP cases. 

Federal Reserve has released market practices to advance standardised implementation of the request for payment (RFP) feature of instant payments.

The market practices are intended to be detailed, tactical, and immediately applicable for financial institutions and their service providers that are ready to offer RFPs to customers. Billers, merchants, and other industry participants could also find them relevant, given the growing uptake of instant payments.  

Highlights of the Market Practices:

  • Recommendations on enrolling and enabling billers and customers to send and receive RFPs 

  • Specific criteria for populating and presenting clear request for payment messages 

  • Options of useful data passed back to the biller 

As a result of industry feedback, the Federal Reserve also updated the FedNow Service Operating Procedures to provide context related to RFP warranties. The updates include the meaning of legitimate purpose with respect to RFPs, guidance on the scope of the warranty provided when a financial institution sends an RFP, financial institution obligations for monitoring customer RFP use and investigating anomalous activity, and procedures for initiating claims related to alleged breaches of RFP warranties. 

More About FedNow Service 

The service is available to institutions in the US, enabling individuals and businesses to send instant payments through their depository institution accounts. The service is designed to be a neutral platform that supports a wide range of instant payments. At a basic level, the service provides interbank clearing and settlement that enables funds to be transferred from the account of a sender to the account of a receiver in near real time. Depository institutions and their service providers are also able to build on this fundamental capability to offer value-added services to their customers. 

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Keywords: real-time payments, instant payments, Request to Pay, financial services, financial institutions
Categories: Payments & Commerce
Companies: Federal Reserve
Countries: United States
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Payments & Commerce

Federal Reserve

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