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FedNow® Service Negative List

By Sharon Hallmark posted 09-01-2023 09:51

  

Do faster, instant payments mean faster fraud? That’s the question on everyone’s mind and one that has been addressed by both RTP® and FedNow®.

Today, we’ll touch specifically on how FedNow® has addressed these concerns, given that the service is top of mind for many with its recent launch. The FedNow® Service has many ways to help mitigate fraud, including the FedNow® Negative List. 

So, what is the FedNow® Negative List? The Negative List is managed by FedNow® service participants and enables financial institutions to prohibit instant payments from coming into or going out to specified accounts. 

Use of the Negative List is optional, and financial institutions can enroll in the Negative List for one or more assigned routing numbers. The entries within each participant's Negative List are not shared with other participants in the FedNow® Service network but are used by the financial institution to restrict transfers coming into or out of their financial institution. A participating financial institution can add an “entry pair”, consisting of an account and routing number, that they have placed transfer restrictions on. There are three restriction options:

  • Restrict send only - messages sent to this entry pair are rejected.
  • Restrict receive only - messages received from this entry pair are rejected.
  • Restrict both send and receive activity - messages where the entry pair of either the sender or receiver is rejected.

For financial institutions enrolled in the Negative List, a check for entry pair matches is completed during the FedNow® Service validation phase. If there is an exact entry pair match, the message will be rejected according to the participant’s specified transfer restrictions. If the Negative List checking process exceeds the time limitation, the message is not checked against the Negative List and continues processing.

Financial institutions are responsible for adding and deleting entry pairs (routing and account number) from their Negative List. The list can hold up to 100,000 entry pairs per financial institution routing number (RTN). Once a financial institution has been onboarded with the FedNow® Service, they can enroll, modify or unenroll in the Negative List by contacting the FRB Services Support Center at 1.833.FRS.SVCS (1.833.377.7827).

Currently, enrollment in the Negative List has no additional fees and is included in the monthly FedNow® Service participation fee. Choosing to participate in the FedNow® Negative List is a great option for financial institutions to work together to uphold the integrity of the FedNow Service and help combat fraud.

Ready to start your FedNow® or RTP® journey? Our team of experts is here to help! Check out our website for more information on our Faster Payments Launch Service and reach out to us at advisoryservices@epcor.org with any questions. We hope to hear from you soon!

   

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