Payfinia Launches New CUSO to Enhance Payments Modernization for Credit Unions
Payfinia, Inc. has announced the launch of the Payfinia Credit Union Service Organization (CUSO), aimed at advancing payment modernization and enhancing fraud prevention capabilities through its open payments platform. This initiative is designed to support credit unions and industry partners in offering seamless, instant payment solutions.
Origins of Payfinia
Payfinia was established in 2023 as a collaborative effort between digital banking provider Tyfone and its long-time partner, Star One Credit Union (based in Sunnyvale, California, with $9.9 billion in assets and 126,000 members). Together, they developed the Instant Payment Xchange™ (IPX)—an open, Payments-as-a-Service (PaaS) framework certified to process instant payments via the FedNow Service.
Strategic Investment and Successful Pilot Transactions
To drive the initiative forward, Star One Credit Union invested $4.5 million into the formation of the CUSO and actively contributed to shaping its product roadmap. During the pilot phase, Star One conducted a series of $500,000 instant payment transactions using the FedNow Service. These transactions were routed to Payfinia’s business account at U.S. Bank via the IPX platform, integrated with Tyfone’s nFinia™ Digital Banking Platform. Remarkably, each transaction was settled in under five seconds. Additionally, Payfinia leveraged advanced user controls within the IPX platform to enable higher transaction limits, demonstrating the system’s robust fraud control capabilities.
Enhancing Member Experience and Reducing Fraud
“Star One is excited to support Payfinia’s mission to bring instant payment capabilities to all account holders in the U.S.,” said Gary Rodrigues, CEO of Star One Credit Union. “The IPX solution empowers our members with better control over their cash flow. So far, it has replaced 25% of same-day ACH transactions, reduced fraud losses by 53%, and achieved an 83% decrease in operational overhead for peer-to-peer (P2P) payments.”
Growing Demand for Instant Payments
Data from Payfinia indicates a rising demand for low-friction, account-to-account transfers, which constitute a significant portion of instant payments processed on its platform. “Early adopters of the IPX platform are seeing significant benefits, including faster transaction processing, lower fraud rates, and increased operational efficiency,” noted Nizar Jamal, COO and CTO of Payfinia.
Addressing Challenges for Community Financial Institutions
Keith Riddle, General Manager of Payfinia CUSO, highlighted the barriers community-based financial institutions face in adopting instant payment systems, such as limited resources, outdated technology, and high implementation costs. “Payfinia is building an ecosystem to address these challenges,” Riddle explained. “The IPX platform offers scalable, cost-effective payment solutions tailored to meet the needs of diverse financial institutions.”
Future Integration and Broader Accessibility
Payfinia envisions a central bank-operated instant payments system as a critical component for ensuring widespread accessibility. To expand its offerings, Payfinia is collaborating with various partners, including core processors, third-party digital platforms, and fintech companies, to integrate instant payment functionalities into their digital services. Additionally, to enhance resilience and offer more options to its partners, Payfinia plans to integrate IPX capabilities with The Clearing House RTP® network by early 2025.
This initiative marks a significant step in the modernization of payment systems for credit unions, setting a new standard for speed, security, and efficiency in the financial sector.
About Payfinia, Inc.
Payfinia is an independent payments company designed to democratize instant payments and provide community financial institutions (CFIs) access to and ownership of their instant payments services. Payfinia’s flagship product offering, the Instant Payments Xchange (IPX), is an all-encompassing real-time money movement service. Additionally, Payfinia partners with third-party digital providers to integrate instant payments with traditional payment and money movement solutions, extending the technology provider’s capabilities, while also providing member FIs a more robust payments ecosystem.
