Request FedNow Payments

To implement digital invoicing through Real-Time Payments services with ISO 20022 for Request FedNow Payments to payers from payees for instant payment service, you can follow these steps:

Payee Side (Request Initiation):

1. Invoice Generation: The payee generates an invoice detailing the payment amount, payer information, and other necessary details using their invoicing system.
2. Integration with Real-Time Payments Provider: The payee's system integrates with a Real-Time Payments service provider capable of handling ISO 20022 messages for instant payments, ensuring compatibility with the FedNow network.
3. Encoding: The invoice data is encoded into the ISO 20022 format, adhering to the standards required by the Real-Time Payments service provider and the FedNow network.
4. Digital Signature (Optional): Optionally, the payee may apply a digital signature to the invoice for added security and authenticity.
5. Transmission: The encoded invoice is securely transmitted to the payer's financial institution through digital channels supported by the Real-Time Payments service provider, such as APIs or secure messaging protocols.

Payer Side:

1. Invoice Receipt: The payer's financial institution receives the invoice digitally in real-time through the Real-Time Payments service provider.
2. Review and Approval: The payer reviews the invoice details and approves the payment request through their banking app or online banking portal.
3. Authorization: Upon approval, the payer's financial institution authorizes the FedNow payment transaction in real-time, leveraging the ISO 20022 message format.

Payment Processing:

1. Real-Time Authorization: The payer's financial institution verifies the payment request and authorizes the FedNow payment transaction instantly, ensuring immediate funds transfer.
2. Funds Transfer: Funds are transferred in real-time from the payer's account to the payee's account via the FedNow network, facilitated by the Real-Time Payments service provider.

Confirmation and Reconciliation:

1. Payment Confirmation: Both the payee and the payer receive instant confirmation of the payment transaction from their respective financial institutions, providing assurance of payment completion.
2. Reconciliation: The payment transaction is automatically reconciled within the financial systems of both the payee and the payer, ensuring accurate accounting and financial records.

Benefits:

• Efficiency: Digital invoicing through Real-Time Payments services streamlines the payment process, reducing manual intervention and processing time.
• Convenience: Integration with Real-Time Payments providers offers a user-friendly experience for both payees and payers, enabling seamless payment processing within existing banking platforms.
• Security: Secure transmission channels and adherence to ISO 20022 standards ensure data security and protect against unauthorized access or tampering.
• Accuracy: Standardized invoice formats and automated reconciliation features provided by Real-Time Payments services minimize errors and discrepancies.

By leveraging digital invoicing through Real-Time Payments services with ISO 20022 for Request FedNow Payments, businesses can enjoy streamlined, efficient, and secure payment transactions, ensuring timely payment processing and improved cash flow management.