Venmo for rent. Apple Pay for groceries. Instant everything, everywhere, all the time. Your members are not waiting for payments to modernize. They already moved on. The question is whether your credit union moved with them.
Keith Riddle, General Manager at Payfinia, joined Sarah Snell Cooke of The Credit Union Connection to break down embedded payment services, what a phased modernization plan actually looks like, and how credit unions can offer real-time payments without opening the door to fraud or blowing up their existing tech stack. Payfinia, notably, powered the first FedNow send transaction in the country. Keith has seen this from the very beginning.
The conversation opens with fraud, because that is where most credit union leaders get stuck. Keith’s answer is not reassuring platitudes. It is granular controls: how many times a member can send per day, per week, per month, dollar amount limits, and cooloff periods specifically designed to catch account takeover scenarios before they escalate. The key insight is that authorized push payments, where the member has to actively initiate the transaction, have a fraction of the fraud rates of check or pull payment systems. That is not a talking point. That is how the math works.
“It’s not just the transaction expenditure. It’s draining out the operational cost in terms of settlement, reconciliation, and exceptions.” — Keith Riddle
On the trends side, Keith walks through the use cases credit unions should be paying attention to right now. Account-to-account transfers already account for over 40% of instant payment volume. Digital wallet drawdowns from PayPal, Venmo, Coinbase, and Robinhood are a fast-growing receive use case because members want to pull those funds into their credit union account instantly. Bill payment is about to evolve significantly over the next 12 to 18 months. And for credit unions serving small and medium businesses, instant payments are not just a convenience feature. They are a lifeline for SMBs managing cash flow.
One area Keith flags that often gets overlooked is disbursements. Many credit unions are still sending checks or wires to their preferred auto dealers. That is both expensive and slow. Switching those flows to instant payments saves operational cost, delivers better service to dealers, and can actually improve the credit union’s standing with those partners.
The modernization roadmap Keith recommends is refreshingly practical. Start with receive. It is a light integration, compatible with all major credit union cores, and you can be live in 60 to 90 days. From there, layer in send with the right fraud controls in place. Then use the data those payment flows generate, knowing whether a deposit came from Robinhood, an earned wage access app, or a small business platform, to deepen member relationships and design better offerings. The foundation matters. Everything else builds on top of it.
NOTE: If transcription were this AI’s superpower, it would be a very disappointing superhero origin story.
Sarah Snell Cooke
Hey everyone, welcome to The Credit Union Connection. I am Sarah Snell Cooke, your host here. Your members are not just waiting for checks to clear anymore. They are Venmoing their rent, Apple Paying their groceries, expecting instant everything. Today I am talking with Keith Riddle, General Manager at Payfinia, about embedded payment services that actually modernize payment flows without ripping out your entire tech stack. We are talking instant payments, digital wallets, account transfers, and fraud controls granular enough to catch the bad guys without annoying your good members. Keith is breaking down the trends credit unions need to pay attention to, digital wallet drawdowns, bill payment evolution, how to optimize interchange revenue instead of leaving money on the table, and a phased modernization plan so you are not trying to do everything at once and breaking things in the process.
Welcome everyone. I am Sarah Snell Cooke, your host here at The Credit Union Connection. I am joined today by Keith Riddle. Welcome.
Keith Riddle
Thank you, Sarah. Good to connect with you again.
Sarah Snell Cooke
Good to see you again as well. Keith is the General Manager at Payfinia. Why don’t you give us a little introduction to yourself and the company?
Keith Riddle
Sure. I am Keith Riddle, General Manager of Payfinia. I have been in financial services for more than I would like to admit in terms of years. We are going on 40 years in financial services, a lot of that focused on payments, digital experience, payments modernization, and fintech expertise serving the credit union community and community financial institutions. What we do at Payfinia is serve as an embedded payment services provider for credit unions and community financial institutions who want to modernize their payment flows to include instant payments on both the RTP network and FedNow. We have also recently introduced a digital wallet service in partnership with Pays, which is an EWS company, so that the credit union can optimize their interchange income, drain out payment inefficiencies, make payment flows instant, and deliver value to the member.
Sarah Snell Cooke
Obviously there are concerns among credit union leaders about real-time payments. Beyond helping consumers get their money faster, there is also the chance that a fraudster is on the other end. How can credit unions safely offer these kinds of real-time and embedded payments while still serving their members well?
Keith Riddle
Great question. What was unique about Payfinia is that we actually started our instant payment journey enabling send and receive functionality on the FedNow service. We powered the first FedNow send transaction in the country in partnership with our lead credit union, Star One Credit Union, who ultimately became an investor in our CUSO structure. To answer your question directly, it is about layered fraud controls and the granularity you offer in your platform. Providing access to the networks is actually the easiest part. Once you certify into those networks, they are there 24/7 to accept or send transactions. But when members or credit union businesses want to start sending, that is where you need granular controls and risk mitigation. The credit union would control how many times they want to allow a member to send each day, week, or month. Same with dollar amounts. We also build in cooloff periods because account takeover is very prevalent across all financial institutions. If someone takes over an account and immediately starts adding payees and sending rapidly at higher dollar amounts, those cooloff periods catch that behavior. A new sender might start at 10% of their normal limit and graduate into what we call safe sender and recipient binding. Beyond that, the authorized push payment model itself is safer because the member has to actively initiate the transaction. That is why authorized push payment fraud rates are a fraction of what check or other pull payment systems have.
Sarah Snell Cooke
Integration is a huge issue because not everything plays nicely with everything else. How do these embedded platforms work within a credit union’s existing tech stack?
Keith Riddle
It is really about collaboration with the digital experience provider. We were fortunate in that we were launched out of a digital banking platform provider, incubated and launched, and now operate independently while bringing those same best practices to external platforms. Whether it is a digital banking platform that has an account-to-account transfer workflow, we can upgrade that to reflect the ability to send from a checking account at the credit union to an external account instantly. We have an open API message set that the digital banking provider can consume, and we manage the core integration either with them or separately. It is about having an open platform and a willing partner who is collaborating with their clients to consume those messages. And it is worth noting that the credit union also wants to send payments instantly, not just members. Post-mortgage closing transactions, payments to preferred auto dealers, supplier payments that are too slow for ACH and too costly for wire. Those are all real use cases. Receiving payments, having the credit union send, having the member send. You need a willing partner to consume the APIs or develop experiences that snap the capability into a platform.
Sarah Snell Cooke
As they scale, the fraud risk is also going to scale. When you are talking to a credit union leader, how are you assuring them that you have what it takes to keep their membership safe?
Keith Riddle
A lot of folks talk about fraud controls but do not have proven metrics to show what they have actually done in that layered fraud approach. We do, because of our unique journey starting with send. We will work with the credit union to walk through the very granular controls available, the use cases where they plan to expose the functionality, and then we layer in external tools that complement our internal controls. For instant payments, because it is authorized push, someone has to go into the experience, have the funds, initiate the payment, and pass through all the granular controls including external controls before the payment is released. Authorized push payment fraud rates are genuinely a fraction of check or pull payment systems. That is the story.
Sarah Snell Cooke
What are the top payment trends credit unions should be paying attention to right now?
Keith Riddle
If you are serving a lot of consumers, account-to-account transfer accounts for over 40% of instant payment volume today. That is consumers who have multiple accounts and want to freely move money from their credit union checking account to an external account. Ironically, a lot of larger institutions do not offer the same flexibility, which is actually an advantage for the credit union. They will likely grow their deposit base by offering that freedom of money movement. Digital wallet drawdowns are a leading use case for instant payment support. Members with PayPal, Venmo, Grubhub, Coinbase, Robinhood, they want to draw those funds into their credit union checking account instantly rather than watching cryptocurrency values fluctuate. People are willing to pay for convenience and instantaneous money movement, and that is exactly what those digital platforms already deliver. Bill payment is going to evolve significantly over the next 12 to 18 months. For credit unions serving small and medium businesses, that is the arm where you can really monetize instant payment support, both on the receive and send sides. Cash flow is critical to SMBs and slow payments create real liquidity challenges. Finally, credit unions should not overlook their disbursement use cases, especially the ones still going through wire or check to preferred auto dealers. Switching those flows to instant payments saves operational cost and improves your standing with those dealers.
Sarah Snell Cooke
When you say it is less expensive, how much savings are we actually talking about?
Keith Riddle
The transaction expense itself is similar to same-day ACH, but you get the immediacy of reconciliation and settlement on top of that. When a transaction comes into the credit union it hits their master account at the Fed or the clearing house instantly and becomes operating capital. Same with sending. It is instantaneous debit from the master account and the recipient experiences the same efficiency. So it is not just the transaction expenditure. It is draining out the operational cost in terms of settlement, reconciliation, and exceptions, because these are authorized push payments and therefore irrevocable unless they land at the incorrect account inadvertently. The operating environment can be up to four times lower cost, and you combine that with a lower fraud environment. Those two items together make a strong case to deploy.
Sarah Snell Cooke
For credit unions still on the sidelines, what is a realistic first step?
Keith Riddle
Look at instant payments as part of a broader payments strategy, not a standalone strategy. The first step is to enhance your members’ ability to receive funds. The byproduct is increased deposits and the ability to monitor what activity is coming from their senders. One thing that is often overlooked in the entire instant payment environment is the data value. We provide access to all of that data so the credit union can see what kind of transaction activity is coming from Robinhood versus an earned wage access app versus an instant payroll versus a small business application. Those are strong indicators for service design and deepening member relationships. Start with receive. It is a light integration into the core and we are integrated on all the major credit union cores. You can be up and running in 60 to 90 days. Then when you get into send, work through the use cases, the fraud mitigation framework, and the device data layers. And do not forget member education. Inform them that if they add your routing and transit number and account number to their Uber or PayPal or Venmo, those payments will arrive instantly. There are subtle ways to bring that membership education to the forefront.
Sarah Snell Cooke
Looking ahead, how do you see instant payments evolving for credit unions and what should leadership be preparing for over the next three to five years?
Keith Riddle
There are a lot of payment streams evolving, from same-day ACH growth to stablecoin and digital assets. As part of a broader payment strategy, credit unions need to ask: what are our interchange revenue goals? We have a digital wallet through Pays that allows you to optimize digital interchange based on e-commerce transactions. Where do you want to draw out expense from a payments perspective? How do you want to orchestrate flows from consumers to businesses? We are building services that bridge those two sides, including QR code payments and request-for-payment functionality that can initiate an authorized push payment for something like an auto loan. There are a variety of things that become extensions of having the instant payment foundation in place. To us, we are an open payment platform, and all of those elements are things we can orchestrate into the workflows over time.
Sarah Snell Cooke
I always love my guests’ final thoughts. What would you like to leave our audience with?
Keith Riddle
Take a pragmatic approach to enablement in a phased model. We will often work with a credit union to put together a modernization plan that talks through those stages and what they should take into consideration building out a comprehensive plan for both the member and the credit union. The final point is that it is really part of a broader payments modernization strategy. What are you planning to do to optimize interchange revenue? What are you going to do for digital assets and stablecoin and evolving payment types? What are you looking at in terms of new payment initiation like QR codes? How does that coalesce with your strategy in a manageable fashion? No institution regardless of size can take all of those things on at once. Doing it in an organized way with an open payment framework that can handle it efficiently is key.
Sarah Snell Cooke
Makes sense. Thank you so much for your time and expertise today. I appreciate it.