Federal Reserve Financial Services (FRFS) will be implementing its new message format for its Fedwire Funds Service on July 14. The transition will coincide closely with FRFS’s recent integration of enhanced risk mitigation features into its instant payment service, FedNow.
The ISO 20022 format has been described as more data-rich than Fedwire’s legacy message format for wires. The FRFS, which is operated by the Federal Reserve, noted the ISO 20022 software and production infrastructure will remain unchanged.
On June 24, the FRFS activated a new account activity threshold feature for its FedNow service, which was designed to help financial institutions strengthen risk mitigation efforts by defining dollar value and transaction velocity thresholds based on customer segments. The new functionality came with a transaction limit increase from $500,000 to $1 million to support higher-value use cases, including business-related transactions.
“These new value-added features offer FedNow participants more options to customize their instant payments profile, adding to the suite of available tools that allow financial institutions to tailor activity according to risk management needs and customer activity,” FRFS Chief Payments Executive Mark Gould said in a press release. “Feedback from the industry has been invaluable, and we intend to remain agile and responsive to new and changing customer needs as instant payments grow and mature.”
Account activity thresholds provide further control as more financial institutions enable “send” capabilities on the network, according to the release. Financial institutions can set parameters around sending activity, from established business customers to new individual account holders, for an additional level of security.