iWallet Announces Plans to Support FedNow Check Deposits
As the FedNow service rolls out, one business-centric check deposit app has announced plans to bring its capabilities to its platform.
About the update and FedNow:
The FinTech app iWallet has announced that it will soon integrate FedNow into its service. According to the startup, they’ll be one of the first processing apps to support the real-time check deposit technology. Currently, iWallet expects the update to be available by the end of this year.
Announced in July, FedNow is a new system from the Federal Reserve that allows for instant payments. Currently, banks and credit unions can sign-up to use the tool. Furthermore, the Federal Reserve says that more than 35 institutions — including major banks such as JPMorgan Chase, Wells Fargo, U.S. Bank, and others — have become early adopters along with service providers that will support FedNow.
According to iWallet, once FedNow rolls out, there will be a small change to their process. Namely, the check writer will receive an SMS from their bank, providing them with a code to confirm the transaction. Once that code is used for approval, the check will be instantly processed. Then, depositors will receive notification that the funds have been received.
iWallet is a payment app built for businesses. Using the app, workers can deposit checks while in the field, allowing them to collect payments from clients and instantly deposit them. As they note, this solution helps cut down on wait times for funds, reduces bounced checks, and gives clients another payment option.
What they’re saying:
Commenting on iWallet’s adoption of FedNow, the company’s founder and CEO Jim Kolchin said, “Traditionally merchants pay a processing fee to use credit cards and businesses aren’t able to have their technicians make remote check deposits in the field. As an early adopter of FedNow, iWallet will be offering real-time paper check deposits free to qualified businesses.”
For certain small businesses, a tool such as iWallet already sounds immensely helpful in terms of collecting payments and managing cashflow. Thus, the upcoming integration with FedNow can only make this tool more powerful. With that said, as iWallet themselves warn, the full vision of FedNow won’t be fulfilled until all banks join the service — which could take some time. Luckily, though, with banks and credit unions of various sizes already signing on to be early adopters, hopefully this won’t be too much of a factor for startups, businesses, or consumers.
All in all, while iWallet may be a useful service for certain businesses, as far as this story goes, it’s the FedNow service that’s the FinTech development worth watching.