Jack Henry & Associates expects to be the first payments processor to go live with FedNow when the Federal Reserve’s real-time payments service debuts in July.
“We will be the first processor going live with the FedNow product in the summer,” Greg Adelson, Jack Henry’s president and chief operating officer, told an analyst during the financial technology company’s fiscal second quarter earnings call.
In another instance, Adelson specifically said that roll-out would happen in “July” and that timeframe is noteworthy because the Fed has only previously said that it would launch the new instant payments network as early as May and no later than July.
Monett, Missouri-based Jack Henry has been working with the Federal Reserve for more than two years to prepare for the July debut of the FedNow service, and somewhere between 25 and 30 financial institutions will be part of Jack Henry’s initial launch, Adelson said.
Jack Henry’s clients tend to be mid-tier banks, including regional and community banks, and credit unions.
“The interest level with the community institutions is very high,” he said. That’s partly because the existing real-time payments rival, The Clearing House, is owned by the larger banks, and smaller banks have been hesitant to do business with a system run by their bigger competitors. Still, about 60% of The Clearing House institutions are Jack Henry institutions today, Adelson said.
Jack Henry reported its fiscal second quarter revenue increased just 2.3%, to $505.3 million, and its net income fell 15.6% year over year, to $80.8 million, according to a Tuesday news release.