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FedNow, the real-time payment service offered by the Federal Reserve, will make what it calls a network intelligence API available beginning April 28.
The API means FedNow users, be they banks, credit unions, or service providers, will be able to access receiver account-level data seen over the instant payment network. In practical terms that means data such as the volume and value of recent transactions involving the receiver account. Users can see the real-time, network level data coming from the API feed when they receive a transaction request.
This can help a FedNow user get a jump on any risk of a potential payment. “The network intelligence API delivers instant, network-level data insights that complement participants’ existing risk management capabilities, providing more information—and confidence—before a transaction is made,” Nick Stanescu, executive vice president and chief executive of FedNow, says in a statement to Digital Transactions News.
The data gleaned from the API integration is meant to complement a financial institution’s existing data that’s already collected as part of its risk assessment process. The API will be part of the Federal Reserve Financial Service fraud and risk mitigation tools.
In addition to an early view on the risk of a real-time FedNow transaction, the API also gives users information about the transaction, and it is easily integrated, the Fed says.
In tests at Jack Henry & Associates Inc., a bank core processor, the API was able to “enrich transaction data before fraud review,” making it very beneficial, Tede Forman, Jack Henry president of payment solutions, says in a statement. Use of the API meant more data, more visibility, and more security, Forman says.
