New Payment Rails to Rely on RFP for More Security

As ACH continues to dominate U.S. financial transactions, newer payment rails, including FedNow, are working to make their platforms more secure. One of the ways they are doing this is by implementing a request for payment or RFP. Ani Narayan at Modern Treasury discussed the implications of this move.

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Narayan, product lead for payments at Modern Treasury, said RFP is the equivalent of a debit on an RTP network. “You can’t just pull money out of another person’s account and have that settled instantly with irrevocability. What you have to do is send the notification to a counterparty to request that they push funds to you. So it is an authorized push payment on behalf of your counterparty,” he said.

But RFP needs more work before it can replace ACH. “It is still being built out. It’s available on the RTP network. It’ll soon be available on the FedNow network, but it needs to become ubiquitous,” Narayan said. Both the originating bank and the rest of the banking system need to be able to support this capability, he said.

In this video interview with Information Security Media Group, Narayan discussed:

• The drawbacks of ACH that lead to fraud;
• Challenges and solutions in adopting RFP to combat ACH fraud;
• The benefits and challenges of two-way communication in RFP and RTP platforms such as FedNow.

Narayan focuses on building payment operations infrastructure for instant payments and driving adoption among corporate entities. Prior to Modern Treasury, he was on the early product and growth team at Microsoft Teams.