Plaid and Cross River Team on Real-Time Payments With FedNow

Cross River Bank and Plaid say they’ve joined FedNow® Service to widen customers’ instant payment access.

The collaboration, announced Monday (Sept. 18), also makes Cross River among the first financial institutions to bring an interoperable offering to its customers providing routing options via either the FedNow Service or the RTP® network.

“When enabled, the interoperable offering from Cross River means consumers and businesses can count on efficient, secure and reliable money movement, such as when managing their funds, paying bills, receiving payouts and avoiding late fees,” according to Cross River.

The bank said the interoperable capability gives partners “more optionality and choice” for allowing immediate and more efficient transactions for end-users, offering consumers and businesses secure, efficient and reliable money movement.

Cross River said that singular endpoints will let its partners “select instant payments as an integrated solution and opt for their preferred payment rail based on eligibility, but ultimately rely on both as needed.”

PYMNTS looked at the launch of the FedNow Service and the issue of interoperability earlier this year in a conversation with Miriam Sheril, head of product — US at payments platform Form3.

“Interoperability, of course, will be a significant tailwind towards more mainstream adoption of instant payments — especially with cross-border payments,” that report said. 

Sheril argued that intelligent routing could solve issues connected to interoperability through application programming interfaces (APIs) that initiate payments and automatically route them to the appropriate payment rail. 

“The rise of digital payments — and faster payments in particular — demands interoperability as businesses and consumers want to be able to mix and match payment types, depending on the use cases, the transaction value and the urgency of a particular transaction’s settlement times,” PYMNTS wrote last week in a report on central bank digital currencies (CBDCs).

“Against that backdrop, the linking up of CBDC initiatives also will likely help take down silos between faster payments schemes.”

But in the U.S., the report added, interoperability remains an “eventual pursuit,” with the FedNow Service only just weeks old and The Clearing House’s RTP network in operation for six years. 

“Linking those rails together will give some runway to linking faster U.S. payments into an international setting,” PYMNTS wrote.