Faster Payments Operations Overview

The receiver FI validates the message received from RTP for correctness and security. It then sends a "message status report" (pacs.002) to RTP, indicating whether the credit transfer has been accepted, rejected, or accepted without posting.

RTP confirms that the response from the receiver FI was received within the allocated time. It then proceeds to settle the transaction and passes the response to the sending FI.

RTP sends a "message receiver confirmation" message to the receiver FI, notifying them that the transaction has been settled. The receiver FI then makes the funds immediately available to the receiver.

The sending FI authenticates the sender, receives the payment instruction, and performs account and payment verification and approval. It then creates a pacs.008 message and sends it to RTP.

RTP performs a series of formatting, process and business rule validations. This ensures the message is valid before it is sent to the receiver FI.

The initial step where the sender's financial institution (FI) verifies the sender's identity and receives the payment instruction.

The process where the sender's FI ensures the payment is valid and authorized. This includes checking the sender's account balance, earmarking funds, and detecting potential fraud.

The sender's FI generates a standardized message containing the payment details and sends it to the Faster Payment network.

The Faster Payment network routes the validated payment message to the receiver's financial institution.

The receiver's FI processes the payment message, checks for discrepancies, and ultimately makes the funds available to the recipient.

A standardized message sent by the receiver's FI to the sender's FI, confirming the receipt and processing of the payment message.

The final step where the Faster Payment network settles the payment between the sender's and receiver's financial institutions.

When a payment is reversed, the ODFI initiating the reversal must ensure that the sender or ODFI's name is readily identifiable as the same entity that was initially involved in the erroneous entry.

Mastercard utilizes transaction identifier codes to track payments and facilitate post-transaction exception evaluation.

Visa Direct uses various indicators, including error codes, HTTP status codes, and other information, to monitor the status of API calls.

To accept a Same Day ACH reversal, the receiver FI must include a reference to the original credit transfer's unique ID.

For Same Day ACH reversals, the word "REVERSAL" must be included in the Company Entry Description Field in the Company/Batch Header Record.

Validation and message status updates are essential for ensuring smooth and accurate payments in both Real-Time Payments (RTP) and FedNow networks. Participants are expected to validate messages before submission, at each step of the payment flow, and receive confirmations to track the status of the transfer.

Participants use reliable time servers to synchronize their clocks and ensure accurate tracking of processing times. This helps prevent payment rejections caused by timeouts or discrepancies in timekeeping.

Participants are expected to be continuously available to receive and process payment messages. They must have proper monitoring and alerting systems to identify and resolve potential issues quickly.

When issues arise, participants are expected to temporarily stop receiving credit transfer messages. Broadcast messages are used to inform other participants of changes in availability or other important announcements.

To ensure sufficient funds for settlement, participants can engage in FI-to-FI liquidity management transfers. These transfers help maintain the necessary liquidity levels within the payment system.

In RTP, participants must monitor their prefunded positions and provide supplemental funding when needed to ensure settlement. Alerts are sent when prefunded positions fall below a threshold, and participants are encouraged to make arrangements for liquidity transfers during non-Fedwire hours.

Participants in Same Day ACH (Automated Clearing House) must validate messages before submitting them to the network. This process helps to ensure accurate processing and reduces errors.

Both FedNow and RTP use mechanisms to handle potential issues and failures in their respective payment systems. These mechanisms aim to minimize disruptions and ensure the integrity of the payment process.

Requests for returns and reversals are made when a payment transfer is deemed fraudulent or due to error.

The FedNow service allows participants to initiate requests for returns (camt.056) when a payment transfer is deemed fraudulent or due to error.

Similar to a regular customer credit transfer, a payment return (pacs.004) follows the same end-to-end processing within the FedNow Service.

A return request (camt.056) can also be used to report fraudulent activities.

The FedNow service offers the ability to return both normal credit transfers (pacs.008) and liquidity management transfers (pacs.009).

FedNow participants have the option to either honor or decline a return request.

Funds may not be applied by the recipient due to various reasons, including rejected payments.

A FedNow participant may return a credit transfer if they are unable to apply the funds they received.

The Nacha Operating Rules specify how data in ACH network files, batches, and entries should be formatted and what information they should contain.

A notification of change in the ACH network allows the Receiving Depository Financial Institution (RDFI) to inform the Originating Depository Financial Institution (ODFI) about errors in a posted entry, requiring a correction.

Faster Payments networks have predefined actions for participants when a message is rejected during the payment process. These actions help ensure proper handling of failures and ensure the payment process is completed successfully.

To mitigate message rejections and failures in Faster Payments, validating data in real-time is essential. This includes validations like confirming receiving account existence and availability, monitoring payment status, ensuring system availability, and analyzing errors.

The sending Financial Institution (FI) can validate the eligibility of the recipient's card before sending a push-to-card transaction using solutions like Visa Direct and Mastercard Send, enhancing payment security.

In the FedNow system, if a sending FI doesn't receive a payment message (pacs.008), they can resend the message with the same message ID, but they should first wait 25 seconds and check the FedNow interface for the message's status.

When the receiving FI receives a payment message, it validates it for correctness and security. It then sends a