Many credit union leaders’ heads are spinning trying to keep pace with the rapidly evolving payments solutions. On the latest episode of The Credit Union Connection, Sarah Snell Cooke sat down with Tim Rozanski, Co-Founder and Senior Vice President of Sales at Pidgin, and Trey Ragland, Product Development Director at Corporate America Credit Union, to talk about how instant payments are reshaping competition, risk and member expectations.
Faster payments aren’t just a technology upgrade but a means of meeting modern consumers where they are. Trey coined “the fight to remain relevant,” noting that younger generations won’t hesitate to leave if their financial institutions can’t meet their expectations for real-time money movement. His advice to credit unions was to start small with receive-only transactions, build confidence and expand from there.
Tim and Trey agreed that instant payments are giving smaller credit unions a new way to compete with big banks and fintechs. “Members expect a high level of service and strong technology to match it,” Tim says, underscoring how fast innovation has become central to member trust.
Trey’s team at Corporate America Credit Union is putting that mindset into action through collaborative product development. He encouraged credit unions to find partners who innovate alongside them rather than vendors who sell a solution and walk away.
Real-time payments are NOW. Tim pointed to FEMA’s recent use of FedNow for disaster relief as proof that the future is already here. For credit unions, that means being ready to meet members where they are in the wallets and apps that define modern finance.
Both guests ended on a hopeful note. Trey urged credit unions to “get on the networks, get educated and find good partners.” The opportunity is there for those willing to act now and lead the change rather than be left behind chasing it.
NOTE: Sarah has been replaced by AI – did you notice? Anyway, here’s an AI-generated transcript of her doppleganger’s discussion with credit union payments experts Tim and Trey.
Sarah Cooke
Hello and welcome everybody. My name is Sarah Snell Cooke, of course, I am your host today at The Credit Union Connection. I’m here with two lovely gentlemen I’ve got on my left. Tim Rozanski, co founder and Senior Vice President of Sales at Pidgin. Welcome.
Tim Rozanski
Welcome. Thank you, Sarah. Thanks for taking the time today, absolutely.
Sarah Cooke
And on my right is Trey Ragland. He is the product development director at corporate America credit union.
Sarah Cooke
Now I’m going to let each of you guys go a little bit deeper into your own personal introduction as well as the company’s. Tim, why don’t you go first?
Tim Rozanski
Yeah, gladly, Thanks, Sarah. And my name is Tim Rozanski, one of the co founders here at Pidgin. So I run our sales organization, which includes our direct sales team along with partnership sales and sales support.
Sarah Cooke
Okay, and can you talk a little bit more about what Pidgin is doing in the market.
Tim Rozanski
Oh, gladly so pigeon, we’re laser focused on things, all things faster payments. So of course, that includes things like connectivity to fed now, and RTP and on pigeon network, and so much more that. I think we’ll, we’ll talk about this.
Sarah Cooke
Sure. Yes, thank you. That’s awesome. So such interesting stuff going on in that area. And Trey, how about yourself? Talk a little bit more about you and your credit your corporate credit union?
Tim Rozanski
Sure. Yeah. Trey Ragland, I’m the Product Development Director at corporate America credit union. We’re based out of Birmingham, Alabama, but we have roughly 500 or so credit unions across the United States, from California, you know, all the way to this to the East Coast side and, you know, offering services to credit unions from payment services to liquidity, you know, with lines of credit and having additional liquidity investments. You know, also innovating on products as well that fit different use cases that we try to fit from the credit union feedback. So we try to build things based on the feedback that they provide and the burdens that they have.
Sarah Cooke
Yep, always great to be responsive to your members. Now, so how I’m going to start with Tim first. How are instant payments changing the competitive landscape? And what risk do credit unions face if they aren’t adopting these, you know, capabilities?
Tim Rozanski
Yeah, it’s an important topic. What we see in our experience is that instant payments are giving small and mid sized credit unions the ability to really compete with larger credit unions, but also with banks, even with the emerging fintechs that are actively pursuing retail and business members, the risks of avoiding or delaying adoption, really, it can be an inability to compete or ultimately to stay relevant with your membership, leading to an inability to serve your members right? Should keep in mind as well, members can have pretty high standards. So for example, they expect a high degree of service from any credit union, whether they’re big or small, and at this point, they also expect a strong technology offering to round out the member experience.
Sarah Cooke
Absolutely, your turn. Trey.
Tim Rozanski
Yeah. I mean, I can echo a lot of what Tim said. We, we are similar in that regard. We, you know, our tagline is to collaborate with credit unions, ease their burden, so they thrive, right? So that is constantly changing, instant payments, Faster Payments are always a part of that, especially when it comes to remaining relevant in the in the banking or credit union industry, you know, you just think about reputation, risk of not being, you know, so to speak, in the game, on some of these instant payments, or on these rails, at a minimum, from a receive only. You know, that is, you know, we’re all trying to drive and make sure that we’re offering products and services to the next generation. And I think, you know, you think about it, with trends and things that are out there, information that’s out there, these younger generations, the next generation, they’ll leave your institution if they can’t do some of the things that they’re wanting to do out there in the FinTech space, or the or these wallets that are out there. And we need to meet them where they’re, where they are. So if that is the fight to remain relevant, like Tim said, is ongoing, and we start with education, you know, because this is still relatively new, especially on the Fed now side, and so we’ve, we’ve spent a lot of time on the education front, educating our credit unions on what it means, how it’s different from Legacy payment rails, and then trying to find easy wins, easy use cases to implement it into their credit union. Yeah.
Sarah Cooke
Mm, hmm. And so, yeah, you guys mentioned fed now, and RTP from a credit union perspective, I’ll start with you, Trey, what are the strategic considerations in choosing these networks, and do most institutions need both?
Tim Rozanski
Yeah, that’s a great question. Sarah, we’ve it comes up all the time, you know. So we do as part of those education we do payment strategies with credit unions across country, this comes up every single time. You know, which one should we do, especially when fed now came out is like, drove a lot more interest just because the Federal Reserve’s involved, you know, right? It carries a lot of weight, right? But RTP has been around for a long time also. So our, our opinion, our strategy has always been that credit unions should do both. But the reason is, why? So, I think the answer is simply, you would not want to have an ability a scenario where a credit union member is on one you know that credit union is on one platform or on one rail and where they’re sending it, or where they’re getting the payment from, is on another, and it doesn’t go because it’s not interop or not interoperable, right? So it’ll ACH. So you need to be on both whether or not you decide which one that you prefer over the other, with smart routing completely up to them. But, but to avoid what I just said, you know, both sides of the transaction have to be on the same rail. So you want to get into a scenario where you know one side’s on one and you’re on the other, and guess what? It’s going to go ACH or even card or whatever. So that’s our strategy. It’s always been to participate in both rails.
Sarah Cooke
Tim, what do you got to say about that?
Tim Rozanski
Sarah, it’s a question that we get a lot of it as well almost every day. Something to consider is, well, the number of total financial institutions on fed now, now exceeds RTP. We’re still seeing more transaction volume over RTP. I think ultimately, we’d anticipate that they’ll roughly even out as Faster Payments landscape continues to mature, but time will tell. But to better directly answer your question when we’re asked, we typically suggest utilizing both networks, but ultimately, it’s the credit union’s choice, and our technology is flexible enough to allow one or both or even to modify your strategy at a later date if needed. Just keeping in mind as well, I suppose to put a ball on it, having a settlement agent like CACU really does help to iron out some of the complexity of adopting so in conjunction with pigeon and CACU onboarding paperwork, those type of things all get handled with an extra layer of care, which can take out some of the burden of the decisioning,
Sarah Cooke
Right, right? For sure. And so what are the use cases that cartoons are finding most valuable? I’m sorry, I’ll go with Trey first.
Tim Rozanski
You know, we talk a lot about trying to, you know, have a strategy in place. Start with receive only. It’s the easy, it’s the easy win, right? Start with receive only. There’s no front end that you have to have in terms of, you know, an application or anything like that. I talked earlier about meeting those members, where they are, well, they’re out there on these, these digital wallets, you know, you name it. We’ve done a lot of research, and you can do this also. You can see it on your ACH data. You can kind of see what volume that you could project by seeing cash outs in some of these wallets, which we’ve done that from a market research perspective, but they’re out there on Venmo. They’re out there on Cash App and some of the sports gambling apps and Uber, you know, all those gig economy, I guess, is what I’m trying to say. They’re all they’re all out there, and that’s an immediate win, is to be able to allow the members that are on those apps to be able to cast those funds out immediately. And we’ve also done research on how many people will pay the fee to, you know, have those funds cashed out immediately, and it’s more than you would think it was. It was actually astonishing the number of people that that use that functionality. So that’s that immediate use case. You know, once you decide to turn on send, I think it opens up the door. It also opens up the door for risk, which we might talk about later. I’m not sure, but, but you know, when you start sending you think about maybe your business accounts and being able to manage cash flow and increase their cost of funds on things with accounts payables or things invoices that they’re paying. You know, but receive only meet them where they are on the digital wallets is an easy thing to turn on with no product in place. You know, it’s going to come directly to your Deposit Account at the credit union just by turning it off.
Sarah Cooke
And Tim, what are you hearing back from clients? Is that the same thing is the most valuable?
Tim Rozanski
Yeah, you know, I think Sarah, great points made by Trey. I think transacting in real time or near real time, can really bring an overall quality. Of life improvement for retail members, for business members as well, and then also for the credit union staff as a whole, right? Who’s ultimately supporting their members? You think about receiving Faster Payments and what it can mean. And Trey mentioned earned wage access, right? Uber, Lyft, GrubHub, those transactions now go directly to the member accounts, RTP, right? So that’s huge, but then sending as well, once folks are ready having a tightly integrated, full suite of functional services for retail and business members, it’s a it’s a big deal. But I think also we’d be remiss not to mention FEMA. So the Federal Reserve announced very recently that this month, some participants of the Fed now service started receiving instant disaster relief disbursements via fed now. So it’s just, it’s very important news from our point of view, something that I think would be a mistake not to think about.
Sarah Cooke
Yeah, yeah. And Trey, you touched on it a bit ago. What are the risks of credit unions implementing it? Then, what are the kind of security things they need?
Tim Rozanski
And this comes up all the time. I mean, from a receive perspective, you know, these are guaranteed funds. So from a receipt perspective, you know, there’s not as much risk involved as you might think. Now, account, account takeover, things like that. From the you know, the sending side that’s coming in definitely is a continued risk, whether it’s on this rail or any other rail, from a sending side. You know, you’re going to want to use a lot of the same, you know, tools that you put in place for other payment rails, setting limits. You know, you’re not going to give a brand new member the same limit as you might give up a business account, you know, things like that. You can, you can. That’s where pigeons really good with being able to set limits and customize different authority levels, you know, or amounts that can come in on the actual membership base. So, you know, same thing that, that you would do, you know, there’s liquidity risk involved with sin, you know, having, having the funds upfront, since it’s a guaranteed funds network, having the liquidity upfront at the New York Fed for RTP, and also your master account with the Fed, with fed now, which a funding agent or a correspondent, a settlement agent, could help you with that. But those are all things that you want to discuss and consider in your strategy and risk assessments.
Sarah Cooke
Anything to add, Tim?
Tim Rozanski
Summarized it really well. I suppose I would just add that we’re not innately a fraud mitigation platform or tool. That’s not what we specialize in. We solely specialize and focus on Faster Payments. That’s why we exist. But we have built relationships and work with several third parties for folks that want a really, you can call it a Cadillac version, or really sophisticated fraud mitigation tool. So there’s a good chance that we might work with the credit union’s existing tool already. We may have already integrated it, and if we haven’t really, we more or less have the playbook at this point to make that happen in the short term.
Sarah Cooke
And so how are credit unions positioning this? Are they positioning as a member benefit? Is it a revenue generator? What else? What is it?
Tim Rozanski
Yeah, it’s, honestly, it’s, it’s across the board. But I think, I think you could make the argument for a lot of different areas, a lot of different areas, a lot of different business units. Sarah, you know, when you when you talk about liquidity, you know, that gets the CFOs attention and the folks that are in Treasury attention by being able to improve liquidity on the receive side, you know, not being able to hold these funds back from being able to come in instantly on these wallets. Or maybe it’s even an insurance payout. Or now, you know, we’re seeing FEMA payouts, you know, come on, fed now, these are coming in instantly. So you wouldn’t want to hold up liquidity for that. Obviously, you can use that for cost of funds, turn around and make investments out whatever. You know, funds are coming in faster. But you could also make the argument on the member experience side, you know, improving a better experience, like I said earlier, about meeting the members of where they are. It’s not always about your systems and your digital banking and your website or app. You know, that’s definitely important. But like I said earlier, about these wallets, they’re not in your systems, but, but there’s, there could be a negative experience that they think of you as the credit union, if you can’t, you know, if your accounts not able to hook up to it, or certainly not on one of the networks to get the money out, that’s what they really want. And that’s not going to be the fintechs fault. That’s going to be, you know, obviously the infrastructure behind it, which is being on these networks. So that’s definitely a member experience. That’s it’s not, you know, within your four walls that we need to all be thinking about.
Sarah Cooke
Yeah, thank you so much. And so, getting on to the ROI, everybody wants to know the ROI. Tim, why don’t you start? Where do credit unions, seeing as the ROI in this investment,
Tim Rozanski
certainly, and really, we’re of the opinion that credit union. Benefit from looking at this, not necessarily through the lens of our OI initially, but really simply just understanding what you’re losing if you’re not live, at least receiving payments in the near term, it becomes about avoiding the deposit bleed and ultimately driving deposit retention and growing the membership.
Tim Rozanski
Yeah, you know, I think from the receive side, your ROI is going to be on, you know, your balance sheet, right? It’s getting it’s the liquidity that’s coming in, and it’s the cost of funds. You know, when fed funds, you know, were zero, maybe not so much. But we’re not in that environment anymore, you know, they’re not number there. So it matters. So you could, you know, you could, if you really wanted to drill down to it, you know, you could look at all these cash outs and top Fed funds to it to a minimum, you know, for a day’s worth of interest, and get your money. You know, it’s more on the balance sheet side, but from the sin side, I think, I think you definitely have ways to monetize it from especially on if you’re a credit union who has business accounts, and being able to provide them that benefit of being able to hold on to their funds longer, to the last minute, to make accounts payables or payroll, or whatever it may be, to be able to keep that money in their account while they’re earning interest. And, you know, that’s a benefit. So I definitely think you could charge for that, and what that looks like, you know, I don’t know, but I think the market will dictate that over time, as it does with everything else. But, you know, that’s what I’ve seen so far. You know, receive side more on the balance sheet, you know, coming in liquidity benefit, which is ROI. And then, you know, if you want to monetize on the sin side, that’s, that’s available too. So, yeah, I know,
Sarah Cooke
as businesses, it’s valuable, and we’re used to paying fees. The so pigeon right now has 100 financial institutions on your platform. What is the percentage of credit unions versus banks, and is there a different patterns between the two, as far as using it, using it for, what that kind of thing?
Tim Rozanski
Another question that we get pretty often. Sarah, thank you. Right around that 5050, split or so of credit unions and banks just give or take, what we do see is a lot more commercial use cases from banks typically, and we’ve seen a stronger focus on the retail member experience for many credit unions. We can also maybe talk a bit about new payment strategies, try. I don’t know if you’d be comfortable talking a bit about what you’ve seen with the rise platform.
Tim Rozanski
Yeah, yeah, yeah. Outside of you know, obviously our strategy with RTP and instant payments, we have collaborated and innovated alongside with pigeon on building a loan payment product that we call internally, we market it called rise with pigeon, and it is essentially for credit unions to be able to offer and accept or accept loan payments via ACH card. We’re also looking at the request for payment side on the on the instant payment rails too. We haven’t gotten there yet, but that’s definitely on the roadmap to consider. But there’s roughly 50 credit unions on that that utilize that product just for improving member experience. I have an auto loan here. I need an easy way to make a payment at that credit union. That’s what this does. It’s a web based product that they can choose ACH or card. They can set it up on recurring we’re taking in all the loan information so they can have a good user interface and be able to see their loan, pick their loan, and ultimately make their payment, leveraging same day. Ach, so it definitely is a faster payment solution. Card, obviously, from a settlement perspective, is next day, which is, is card. And I think there’s a use case there to, you know, merchant processing is definitely a big use case for instant payments too, because traditionally, that settlement comes in via ACH in the past, so there’s ways to speed that up also. But we’ve had that this product in place for maybe five, six years. Tim that we built from the ground up, we’re constantly enhancing it based on feedback from the credit unions, and it’s been a really good product that we’ve rolled out.
Sarah Cooke
Yeah, sounds good. Anything, anything get money faster around. And so, how does Pidgin integrate into the core systems? Or does it need to? What’s the typical implementation timeline look like, and for, let’s say, a midsize credit union, sure.
Tim Rozanski
So we have API integrations for approximately 17 core platforms today. Give or take, a lot of the common names that might come to mind when you think of core platforms. One of the things that really helped us gain so much traction so quickly, initially, is core integrations were part of our original go to market strategy from day one, so it’s not an afterthought for us. It’s something that was critical all along the way. We made those investments early on, and now we have several that can essentially come off the shelf, so to speak, when bringing on a new customer. So. You with regard to implementation timeline. So let’s just say, for a mid sized Credit Union on correlation or cemetery as an example, it might be 3060, days or so for the core integration to be certified for send and receive on both networks.
Tim Rozanski
Okay, yeah, I can speak a little bit to the you know, on the onboarding for and we’re also a part of the onboarding. If they want to use pigeon and us for the settlement we kind of tackle that as a team. If they’re working with pigeon and us together, certainly they can choose where they want to go from the settlement side, but from the funding agent side or correspondence side with the Fed for settlement. We’ve got a pretty easy onboarding. It’s just setting up an account with us. We use a sub account to their operating account so they’re not intermingled with their other payment rails. So if they have RTP and fed now, they’ll have their own account for each one of those. These, these payments come in individually, not batch. It’s one of the big differences between ACH and instant payments. So we, you know, that was our approach at the beginning, was to not commingle them. Maybe we do in the future, who knows? But so far, it’s been keeping them separate in their own accounts, easy to reconcile back to, you know, their pigeon or to their pay center, if it’s a scimitar, or their payment hub, wherever they’re at, on their core, and being able to reconcile those, you know, on a one to one basis back. But that’s just a matter of, basically, if they’re not a member of us, you know, we onboard them as a member and then set them up with an account, a sub account, or that, if they’re going to be sending, you know, we’ll look at their overall ability from an exposure limit, you know, on sin. So we might set them up with a line of credit. Might not if they already have one in place, just kind of depending on the relationship at that point. But this is all done very quickly. You know, can be done in a week or so, from setting up funding side of things or the funding agent side.
Sarah Cooke
Yeah, yeah, quick for sure. So I always allow my guests to have the final thoughts. Let’s go with Tim first. How what would you like to leave our credit union executive audience with?
Tim Rozanski
Well, Sarah, I know the impetus for this conversation originally was our 100 plus customer announcement. That’s something that we are extremely proud of. We just when we saw the signs several years ago now, at this point that the Faster Payments landscape was emerging in the US, and it just seemed like it was going to be too big to ignore. So we poured a ton of effort and energy and resources into building a product that’s really pretty special. I should point out that our partners, like CACU, some of our core resellers, like Visify, as an example, they also poured a ton of effort and time into this thing. Ultimately, we’re really we’re not surprised to be over the 100 customer mark, but I will admit that it happened a lot sooner than we were originally anticipating. That’s a good thing. And I think while adopted, the adoption of Faster Payments in the US is going strong, it still feels like there’s just a ton more potential to unlock in the months and years ahead. It really just feels like we’re still just scratching the surface at this point.
Sarah Cooke
And Trey take us home. Yeah.
Tim Rozanski
So I would say, you know, don’t be afraid to start something new like this. It’s, it’s nothing like a core conversion or anything like that. So, so, you know, from a resource perspective, at least for this, you know, getting in the game on this, on the receive side, you know, get educated on it first, if you’re not already, and then consider, you know, hopping on the networks, both networks as received participants. Find good partners. We’ve got one here on the screen, from a technology perspective, pigeons, great partner. Look for partners that are going to innovate with you on use cases. You know, this is what partnerships are for, instead of vendors. So find partners that you can innovate with and collaborate with. And you know, if you want to build product out and things like that, definitely collaborate with these partners on these use cases. We’re still kind of in the early stages of this, even though RTP has been out for seven years or so, but we’re still, you know, on the early stages of instant payments. And I think the use cases are going to continue to expand, the volume is going to continue to expand. So, you know, get on the networks, get educated, find good partners, just like we do with everything else. And I think that’s the best thing that that you can do.
Sarah Cooke
Yeah, I love the distinction you made about partners versus vendors. Love it. Alrighty. Thank you so much, gentlemen, for your time today. Thank you. Appreciate you being here your day.
Tim Rozanski
Thank you. Sarah, you as well. Thanks. Ray.