10-Q, Member Exclusive

FedNow is almost here: 3 questions with Temenos’ Heman Daswani

  • Tearsheet spoke to Temenos' Heman Daswani, about how the new FedNow network will facilitate near real-time money transfers, bill payments, and other consumer activities.
  • Shares of Google-parent Alphabet were moving higher, seemingly in response to the WSJ report that the company is planning to add chat functionality to Google Search.

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FedNow is almost here: 3 questions with Temenos’ Heman Daswani

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FedNow is almost here: 3 questions with Temenos' Heman Daswani

FedNow is almost here: 3 questions with Temenos' Heman Daswani

How the Fed plans to reshape the US payments ecosystem with the FedNow service?


The Federal Reserve’s long-awaited digital payments system, FedNow, will be deployed in phases, with the initial launch planned for July 2023.

More than 120 organizations including Square Financial Services, FIS, Fiserv, and Temenos have joined other banks, credit unions, and payments technology organizations to become a part of FedNow’s pilot program. These participants will support the development, testing, and adoption of the FedNow Service, as well as facilitate the development of services and use cases that leverage FedNow functionality.

Tearsheet spoke to Heman Daswani, principal consultant of the business solutions group at Temenos, about how the new payment rail will facilitate near real-time money transfers, bill payments, and other consumer activities.

How will FedNow facilitate instant payments?

Heman Daswani:

  • What we’ve seen with real-time payments schemes globally is that it provides more transparency into current funds. We know that 2 of 3 Americans are living paycheck to paycheck – greater transparency and predictability can potentially improve the way Americans manage their cash flow, and help avoid late fees and accidental overdrafts.
  • Real-time payments will also enable faster, more seamless customer experiences. As FedNow becomes ubiquitous, it will improve Account-to-Account (A2A) transfer use cases – from my account at one bank to my account in another bank, from my bank account to my trading account like Robinhood, for example.
  • At the same time, the experience will improve individual payments processes -- it will also improve B2B payments with access to more information, and ease of reconciliation.

How will FedNow resolve the pain points associated with Bill Pay?

Heman Daswani:

  • With FedNow and real-time payments, the process could be a lot easier. You get a bill from the service provider, it can have an embedded link to make the payment that will automatically redirect to your online banking portal where you review the details and hit submit. All this with the peace of mind that the payment will reach the service provider in seconds.
  • Small businesses can also leverage the network to move money faster. In the past, if they used bill pay they wouldn’t be able to get funds to suppliers as quickly (taking 3-5 business days). So real-time payments can enable SMBs to respond to customer needs faster.

How important it is for businesses to join the FedNow payments network going forward?

Heman Daswani:

  • Ultimately, FedNow and real-time payments will be beneficial to all financial services organizations.
  • Most of the existing payment providers and fintechs are overlay services built on top of the ACH rail -- these services give the perception of instant payments to the end customer (i.e. remote deposit capture) but expose the financial institutions and fintechs to credit risk. On the front end, it looks like the money has moved, but it still needs two days to process on the back end. It’s to their benefit to adopt real-time payments to lower their risk.

Market recap

Fintech stocks saw a sharp fall in the past week

Alphabet - up 7% to $108.90 per share

  • Shares of Google-parent Alphabet were moving higher, seemingly in response to the WSJ report that the company is planning to add chat functionality to Google Search.

MoneyLion - down 14% to $0.5016 per share

  • MoneyLion, which went public through a special purpose acquisition company, has been hammered since it started trading independently.
  • Growing customer acquisition costs and provision for potential losses on loan receivables show the company is still far from profitability -- as the market deals with rising inflation and higher interest rates.

Editor's picks

Tweet of the week

Just look at the charts

This week's reads

Toronto-Dominion becomes the biggest bank short with $3.7 billion on the line


In recent weeks, short sellers have upped their bearish bets against TD Bank, and now have roughly $3.7 billion on the line vis-à-vis Canada's second-largest lender, according to an analysis by S3 Partners. That's the biggest short among financial institutions globally and puts TD ahead of the likes of France's BNP Paribas and Bank of America.

CFPB issues policy statement on ‘abusive practices’


The Consumer Financial Protection Bureau (CFPB) issued guidance to address abusive conduct in consumer financial markets. The policy statement will “assist consumer financial protection enforcers in identifying wrongdoing, and will help firms avoid committing abusive acts or practices,” according to the CFPB.

Madonna's concierge service sues Goldman Sachs in a row over $7bn deal


A Hollywood business manager whose clients have included Madonna and Drake has sued Goldman Sachs, alleging it tricked him into handing over business secrets as part of an effort to agree to a $7bn deal with a private equity group.

Intuit originated $933M in small business loans in FY 2022


Intuit, the software company often associated with Quickbooks, originated $933M in small business loans in its fiscal year 2022. That’s up substantially from the $232M it originated in FY 2021.

BNPL’s low profitability may not matter for Apple


Amid the economic quirks of BNPL, a key question is: Why would Apple enter the BNPL fray, especially now? One possibility is that the company may not be facing the same economic challenges pure play BNPL fintechs face. With Apple’s dedicated and loyal customer base and many merchants already accepting its wallet, the tech giant has no need to spend on customer acquisition or further retailer integration.

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