Get set up as a Sponsor Bank to take on clients to send outgoing FedNow transactions, or payouts. FedNow is a new instant payment service developed by the Federal Reserve Banks to enable any financial institution across the U.S., to provide safe and efficient instant payment services in real time, around the clock, every day of the year.

Use Cases

• B2B Payments: You send funds for a a client that implements security solutions for businesses, and receives FedNow payments from those businesses.
• A2A Payments: You send funds for a client that onboards consumers to grow savings deposits from their employer or primary account.

FedNow Outbound Payment Flow

1. Sends the Create Transaction API Request to initiate a FedNow Credit Transfer. Request body includes achOptions: F for FedNow.
2. TabaPay sends the Outbound Credit Transfer to the Sponsor Bank
3. The Sponsor Bank returns with the Credit Transfer authorization response.
4. TabaPay sends a request to FedNow for a Credit Transfer.
5. FedNow returns with a success or error with accepted (ACTC), or rejected (RJCT).
6. TabaPay sends the response back to the Client.

Sponsor Bank Obligations

• Authorize each outbound credit transfer ONLY if sufficient funds are available in the Merchant
  Prefund Account.
• Move each authorized outbound credit transfer from the Merchant Prefund Account. Do not authorize a payment if the Merchant Prefunded Account has insufficient balance prior to debiting the account.
  Note: Without the Sponsor Bank's successful authorization, the credit transfer is not originated by TabaPay.
• TabaPay maintains a maximum daily limit a Client may originate. The total Sponsor Bank daily limit is governed by the total funds in the FedNow-Sponsor Bank Fed account. This account must be maintained for smooth payments flow and cannot go negative.
• Can lock (or unlock) a merchant on the TabaPay system.
• Can opt for merchants to digitally sign the transaction request with secure credentials provided by Sponsor Bank (when the Client opened their account at the Sponsor Bank) This secure digital signature would provide non-repudiation for Sponsor Bank to debit the merchant account.

How FedNow Send Works

Prerequisites

• Reports - Bank needs to provide TabaPay with a Wire report so TabaPay can update limits.
• Reports - Bank needs an endpoint to receive TabaPay and FedNow reports.
• Optional - If bank wishes to use their own ledger or core banking system to track merchant limits, this is possible.

1. Authorization Request

When sending an outbound FedNow payment, TabaPay will send the Credit Transfer authorization request to the Sponsor Bank to confirm.

2. Return Authorization

The Sponsor Bank sends the authorization response back to TabaPay.

2. Sending pacs.008 Message

TabaPay will send the pacs.008 message to FedNow as shown in the payment flow.

4. Receiving pacs.002 Message (ACTC)

TabaPay will receive the pacs.002 message (ACTC) accepted, or rejected (RJCT).