Galileo Aims to Resolve FedNow's Sender Imbalance in Real-Time Payments
FedNow has rapidly transitioned from a pilot phase to a widely used utility, yet an operational imbalance persists where banks are far more capable of receiving instant payments than initiating them. While over 1,700 financial institutions have enabled receive functions due to simpler infrastructure integration, sending capabilities lag due to complex technological and risk management requirements. Unlike traditional ACH batch processing, real-time payments compress liquidity, fraud detection, and compliance decisions into seconds, demanding continuous 24/7 operational readiness. Ankush Singhal, Director of Product Management at Galileo, highlights that while fraud rates on faster rails are surprisingly low, the need for upstream decision-making creates significant barriers for banks relying on legacy core systems. To address this, platforms like Galileo are stepping in as intermediaries to abstract complexity and lower integration costs. The recent partnership between Galileo and SoFi exemplifies this solution, enabling seamless sending and receiving capabilities without requiring banks to undertake massive individual IT overhauls. This development underscores a shift in banking operations where platform providers play a crucial role in bridging the gap between institutional readiness and the demands of modern real-time payment ecosystems.
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Galileo Aims to Resolve FedNow's Sender Imbalance in Real-Time Payments
FedNow has rapidly transitioned from a pilot phase to a widely used utility, yet an operational imbalance persists where banks are far more capable of receiving instant payments than initiating them. While over 1,700 financial institutions have enabled receive functions due to simpler infrastructure integration, sending capabilities lag due to complex technological and risk management requirements. Unlike traditional ACH batch processing, real-time payments compress liquidity, fraud detection, and compliance decisions into seconds, demanding continuous 24/7 operational readiness. Ankush Singhal, Director of Product Management at Galileo, highlights that while fraud rates on faster rails are surprisingly low, the need for upstream decision-making creates significant barriers for banks relying on legacy core systems. To address this, platforms like Galileo are stepping in as intermediaries to abstract complexity and lower integration costs. The recent partnership between Galileo and SoFi exemplifies this solution, enabling seamless sending and receiving capabilities without requiring banks to undertake massive individual IT overhauls. This development underscores a shift in banking operations where platform providers play a crucial role in bridging the gap between institutional readiness and the demands of modern real-time payment ecosystems.
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