How a Virginia credit union got onboard with sending real-time payments

ABNB Federal Credit Union

Banks and credit unions have taken a cautious approach to supporting send capabilities for instant settlement schemes such as The Clearing House's real-time payments and the Federal Reserve's FedNow due to concerns about fraud. 

But a contrarian, ABNB Federal Credit Union, prioritized turning on send capabilities soon after receive, and said it has been reaping the benefits through lower processing costs and improved access to other products. 

The $882 million-asset Chesapeake, Virginia-based credit union partnered with Alacrity to offer both send and receive capabilities to its members in December 2024, and intended to go live on both sides of the transaction from day one, Cassandra Tucker, director of operations at ABNB Federal Credit Union, said at American Banker's Payments Forum last week. 

"We were live on receive for about six months before we went live with send. We really wanted to only be live for about three months," Tucker said, but noted that the extra implementation time gave ABNB "enough time to get comfortable" with the new rail. 

Banks and credit have been slow to turn on send for real-time payments because of fraud concerns and the inability to revoke the payment once it has been initiated. Navy Federal Credit Union – the largest credit union in the U.S. by assets – said last November that it hadn't turned on send capabilities because it was waiting for the right fraud engine. 

Sending faster payments can be a key revenue driver for financial institutions, and was critical  to monetizing the ABNB's faster payment offering, Turner said. "We wanted to take advantage of the receive use cases, like earned wage access, for our membership. [Receive is] reasonably priced, but for a smaller institution, it's a pretty penny. So, how do we afford to implement those rails through a third party service provider and do that in a cost effective way? That was honestly through send." 

And customers are willing to pay, thanks to the likes of PayPal, Venmo and Cash App normalizing the fact that you pay for immediacy. 

Alacrity has seen increased adoption for both send and receive among its customers, according to Mark Majeske, senior vice president of faster payments. 

"About 95% of our customers deployed both send and receive, [and] they usually take a couple of months in between," Majeske said. 

Turning both on in tandem is also beneficial for financial institutions from a cost perspective, Majeske said. "When you look at the efficiency of getting the team together, putting together a budget [and the] resources to do this, it just makes sense to look at both at the same time. Even if you're not going to use send anytime in the near future, it's better to set it up to do so, because getting the group back together, it's quite costly," he said.

But turning on send wasn't as easy as just flipping a switch for ABNB. The credit union "did a ton of work" leading up to its launch date, Tucker said. 

First, ABNB reviewed its member base to see what its average transaction amount was, which helped it set its limits on faster payments rails. They also evaluated wire volume, which it wanted to cannibalize "a little bit," she said. 

"Wires are super inefficient, at least for us," Tucker said. "They take multiple people to process. The member has to reach out to a frontline representative, and at the time, we weren't allowing direct integration from online banking to our wire provider." 

ABNB also evaluated its losses on automated clearing house originations. "At the end of the day, the liability is pretty much the same whether you're sending money out via ACH through online banking or whether you're sending it out via RTP," she said. "The buck still stops where it stops. [RTP] doesn't change any of that profile from the risk perspective. It's not really that more risky. It's just a quicker risk."

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A full database scan was part of its preparations before launch, too. ABNB worked with its fraud provider that was going to be scoring its real-time transactions, and was able to vet high-risk individuals to ensure it ironed out false positives. 

Finally, ABNB piloted its send capabilities with internal staff for 30 days before enabling the service for its members. 

Delineating send vs receive is not only important for smaller financial institutions, but also for larger ones, such as JPMorgan Chase – the largest bank by assets in the U.S.  

"The send side is more complex," said Matthew Friend, managing director and head of new payment rails at JPMorgan Chase. "Not every transaction is the same. It's very different paying your electric bill versus… funding your account on Super Bowl Sunday trying to place an immediate bet. These two transactions are not the same. We can't treat them the same." 

ABNB's Tucker said that send is just as valuable — if not more valuable — than receive. "You can be on receive all day long, but unless we have more institutions sending, it's really going to create stagnation in the other use cases that are developing [such as] pay by bank, or [request for payment]. You guys just need to do it," she said. "We're a little under a billion dollar institution. If we can make it work on send and receive, I'm pretty sure everyone else in this room can too."