Receive FedNow

To receive a FedNow Request for Payment (RFP) as a Payee—whether in a Business-to-Business (B2B) or Business-to-Consumer (B2C) context—there are specific steps to follow to ensure that the payment request is processed efficiently. The FedNow Service enables instant payments, and as a payee, receiving these requests involves understanding the platform your bank or payment service provider uses, validating the RFP file, and completing the payment process.

Step-by-Step Guide: Receiving a FedNow Request for Payment

1. Understand Your Financial Institution’s FedNow Process

As a payee (whether a business or consumer), the first step is to ensure that your financial institution supports FedNow RFP and is capable of handling incoming payment requests. Many banks will have dashboards or interfaces specifically designed for managing FedNow payments.

• Check with Your Bank: Ensure that your financial institution offers support for FedNow and verify if they allow B2B and B2C requests for payment.
• Confirm Account Readiness: Make sure your business or personal accounts are ready to accept instant payments and are integrated with the FedNow system.

2. Receive the FedNow Request for Payment Notification

When a business or customer sends you a FedNow Request for Payment, you will typically receive a notification through one of several channels:

• Bank Notification: You may receive an alert from your bank or financial institution, either through your online banking dashboard, mobile app, or via email/SMS.
• Electronic Invoice: In a B2B context, the RFP may be accompanied by an electronic invoice sent by the payer.
• Direct Message from the Payer: In some cases, you may receive the RFP file directly from the payer, especially in B2B transactions.

3. Access the FedNow RFP File

The actual FedNow RFP file is typically transmitted in ISO 20022 XML format. However, the way you receive and interact with this file depends on the platform you and your financial institution are using.

Options for Accessing the RFP:

• Via Bank Portal: If your bank handles the transaction directly, you may simply need to log into your online banking platform to view and respond to the RFP.
• Downloadable File: If you receive an RFP file via email or a system that provides a direct file download (often in B2B environments), the file will likely be in ISO 20022 XML or possibly CSV, depending on the integration.

4. Review the RFP Details

Before responding to the Request for Payment, it’s essential to review the following details to ensure everything is in order:

• Debtor Information: Verify the sender’s information to ensure that you recognize the payer.
• Payment Amount: Confirm that the payment amount matches the expected amount.
• Payment Terms: Review any terms or notes attached to the payment request, such as due dates or specific instructions.

5. Validate and Accept the FedNow Request for Payment

Once you have received and reviewed the RFP, follow your financial institution’s process for accepting the payment. This step may differ slightly depending on whether you are handling the request as a business (B2B) or as a consumer (B2C).

For Businesses (B2B):

• Integration with Accounting System: If your business uses an accounting platform that integrates with FedNow (such as QuickBooks Online or NetSuite), you may be able to directly accept the RFP and reconcile the payment within your accounting system.
• Manual Process: Log into your bank’s FedNow portal and manually accept the payment request. Ensure that your business’s accounting system reflects the incoming payment.
• Payment Confirmation: Some systems will automatically confirm payment, while others may require manual confirmation of receipt.

For Consumers (B2C):

• Log into Your Banking Platform: As a consumer, you’ll likely receive the RFP via your bank’s mobile app or online banking dashboard. Log in, view the request, and follow the instructions to authorize and accept the payment.
• Accept and Pay: Depending on your bank, you may be required to provide authorization to confirm receipt of the request before the payment is finalized.

6. Automate the Process (Optional for Businesses)

For businesses that frequently deal with FedNow RFPs (especially in B2B environments), automating the process can be highly beneficial. Here’s how to set it up:

• Integration with ERP/Accounting Software: Many enterprise-level systems like QuickBooks Online or SAP can integrate with FedNow services. By setting up these integrations, incoming RFPs can be automatically reconciled with your accounting software.
• Use APIs: If your financial institution or payment service provider offers an API, you can automate receiving and responding to FedNow RFPs using automated scripts or middleware, ensuring seamless processing of requests and payments.

7. Monitor and Reconcile Payments

Once you have accepted a FedNow Request for Payment, the funds will usually be transferred instantly. Be sure to monitor your financial institution’s dashboard or your business’s accounting system to confirm the transaction was successful.

• Reconcile: Ensure that your accounting software (for B2B) or your personal finance tools (for B2C) are updated to reflect the incoming payment.

Common Scenarios: B2B vs. B2C

1. B2B Context (Business-to-Business)

• Scenario: A supplier sends you a Request for Payment for goods or services.
• Receive and Process: Log into your business’s bank portal, download and review the ISO 20022 file or other format provided, and confirm the payment amount and details.
• Accounting Integration: Use your accounting software to match the payment request with the corresponding invoice and process it in your ERP system.

2. B2C Context (Business-to-Consumer)

• Scenario: A customer sends you a Request for Payment for a product or service you have purchased.
• Receive and Process: As a consumer, your bank will notify you of the incoming request. Simply log into your banking app, review the request, and authorize payment.
• Instant Transfer: After authorization, the funds are transferred in real-time via the FedNow Service.

Key Considerations:

• ISO 20022 Compliance: Ensure that your systems or bank support the ISO 20022 standard, as this is the primary format for FedNow Request for Payments.
• Automation for Businesses: Automating the process is crucial for businesses handling a high volume of payment requests. Work with your ERP or accounting software provider to set up integrations.
• Security and Authentication: Ensure that your financial institution follows proper security protocols, such as multi-factor authentication, to validate and authorize payment requests.

Conclusion

Receiving FedNow Requests for Payment as a payee in both B2B and B2C settings can be straightforward if you have the right systems and processes in place. Whether you are a business using an integrated accounting solution or a consumer using online banking, the key steps involve receiving, reviewing, validating, and accepting the payment request.