FedNow has moved from pilot phase to utility with unusual speed, but its development has produced an uneven landscape in which banks accept instant payments more readily than they can initiate them.
That imbalance reflects a system still settling into its operational demands. As Ankush Singhal, director of Product Management for Money Movement at Galileo, told PYMNTS, the receive function has largely matured, while sending remains constrained by a mix of technology, risk and institutional readiness. “Over 1,700 banks have been enabled for receive side now,” Singhal said, noting that the initial barrier to participation has largely been removed.
The receive capability has become a relatively straightforward extension of existing infrastructure. Financial institutions can post incoming funds to customer accounts without reengineering their systems in fundamental ways. That simplicity explains why many banks began their FedNow journey there.
“Most of these technology providers are able to post the funds to the subledgers,” Singhal said, describing why receiving funds presents fewer complications.
That progress, however, has not translated evenly to the other side of the transaction. Sending money in real time introduces a different set of demands, ones that require banks to rethink how they manage funds, risk and customer expectations.
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The distinction becomes clearer when comparing FedNow to ACH. Traditional batch processing allows banks time to validate transactions, adjust liquidity positions and manage exceptions. Real-time payments compress those activities into the instant a transaction is initiated.
“With ACH, there is more time downstream to review and do the exception handling,” Singhal said. “With real-time payments, banks need stronger controls before the payment is released.”
That compression reshapes the economics of decision-making. Payments now occur at the moment of intent, which gives consumers and businesses immediate access to funds but places greater responsibility on banks to act without delay.
Operational Strain Replaces Timing Flexibility
With instant payments, consumers avoid waiting days for funds to settle. Small businesses can address cash flow needs over weekends. Yet those benefits require banks to operate in a continuous environment.
“FedNow is 24/7, as you know, and it’s weekend and holidays,” Singhal said. “The liquidity that has to be managed is 24/7.” As a result, fraud detection must move upstream, where decisions are made before funds leave an account. The time window for intervention narrows sharply.
There is also a perception that faster payments introduce greater fraud risk. Singhal said early results suggest otherwise. “On these faster payment rails, fraud is actually lower,” he said, citing initial data from Galileo and broader industry observations.
As for the fact that send functions lag, Singhal pointed to ecosystem readiness and integration complexity as the primary constraints.
“It’s less about risk, it’s more about the readiness itself,” he said.
Banks rely heavily on legacy providers for core processing. While those systems can accommodate incoming funds, enabling outbound payments often requires new connections to ledgers, fraud systems and compliance tools. Those upgrades demand both capital and institutional commitment.
“It requires new integrations to cores, to ledgers, to new fraud systems,” Singhal said, adding that such efforts lead to significant IT investments.
Platforms Step in as Intermediaries
The partnership between Galileo and SoFi illustrates how platforms can reduce those barriers. As recently announced, SoFi now supports both sending and receiving through FedNow, enabled by Galileo’s infrastructure.
Singhal described platforms as a way to abstract complexity from banks that might otherwise struggle to justify large-scale upgrades.
“We remove a lot of heavy lifting that is required to get onto the FedNow rails,” he said.
Through a payment hub model, institutions can connect once and gain access to multiple payment rails, including FedNow. That approach allows banks to avoid building separate integrations for each system while incorporating compliance and orchestration capabilities into a single framework.
SoFi’s experience offers a practical example. By extending an existing integration, the company was able to add FedNow functionality without rebuilding its infrastructure.
“They were able to use the same integration and build on top of it and enable it now,” Singhal told PYMNTS.
Account Primacy and Customer Expectations
Real-time payments also influence how customers choose financial institutions. While some observers have suggested that easier money movement could increase account switching, Singhal argued the opposite is more likely in the near term.
“Ninety percent of the respondents said they would use a bank account more if it offered instant payment capabilities,” he said, referencing a Boston Fed study.
The implication is that instant payments strengthen engagement rather than weaken it. Customers value immediate access to funds, particularly in situations that require quick action.
Over time, however, differences in capability may reshape competition. Institutions that fail to offer real-time functionality could see increased outflows, while those that provide it effectively may reinforce their role as primary accounts.
“It’s really about the competition between the institutions that enable these experiences versus the institutions that do not,” Singhal said. “We are starting to move from just access to the actual usage,” he added. “Once you make real-time payments usable and give a great experience to users, adoption follows quickly.”
