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FedNow Implementation: Dual-Rail Payment Orchestration for B2B Fintech

We built a two-rail payment orchestration layer in addition to the existing ACH infrastructure. Custom enterprise software development services included FedNow implementation, RTP connection, intelligent routing, and ISO 20022 migration without core banking system replacement.

 FedNow and RTP payments
A2A payments

Client

The client is an American fintech company that delivers payment services to B2B clients. Seven years of growth had produced a reliable ACH-based real-time payment infrastructure handling 30,000+ daily transactions, but with no instant settlement capability.

As competitors introduced FedNow and RTP, enterprise prospects and existing clients began to question the 2-3-day settlement window. This project combined expertise in fintech software development, payments engineering, and cloud infrastructure.

Business Challenge

The challenges of building real-time payment infrastructure on top of an existing ACH stack are addressed on three levels.

Competitive pressure

73% of US businesses already use instant payments. The platform’s B2B clients were seeing it elsewhere and asking why their payments still took two days. Payroll corrections, supplier disbursements, and B2B collections are exactly the use cases where same-day liquidity drives platform selection.

Security & fraud risks

Unlike reversible ACH transfers, instant payments via FedNow and RTP are immediate and irreversible. This created an urgent need for an advanced pre-payment validation system with behavioral detection and ML capabilities to block fraud before the funds permanently leave the system.

Technical bottleneck

The existing ACH integration did not support ISO 20022, used by both rails for instant payments, and lacked extended metadata handling, resulting in a data gap during the transition to instant payments. Growing market requirements for ISO 20022 migration across all instant payment types added further urgency. Payment hubs that are available off-the-shelf solve regular tasks but won’t integrate smoothly with a proprietary stack.

Operational complexity

FedNow and RTP are not interchangeable. The maximum transaction amount for RTP is $10M, while for FedNow it is $1M. Furthermore, not all banks that receive funds are part of both FedNow and RTP. The ACH payment system cannot be turned off because other processes still use it.

Solution

Jelvix provided payments consulting services and created an orchestration layer atop the existing ACH framework with RTP and FedNow implementation.

Module 1: Dual-rail connectivity

FedNow from FedLine and RTP payments from The Clearing House included participant set-up, ISO 20022 message processing, credit transfers, and RFP flows using a sponsor bank collaboration. A real-time bank coverage database verifies the recipient’s availability and automatically switches to another network or ACH system if required.

Module 2: Smart routing engine

The payment orchestration layer routes every transaction to the optimal rail automatically based on amount, payment type, urgency, bank availability, and cost. 

Module 3: ISO 20022 translation layer

Two-way ISO 20022 migration for ACH with no upstream changes. Extended data mapping for remittance and invoice information that ACH does not have, closing off the compliance requirement of Fedwire for 2025.

Module 4: Pre-payment fraud and risk layer

Each payment goes through an intelligent pipeline that includes validating the account, velocity checks, and behavioral detection. Machine learning algorithms are used to detect any anomalies, and idempotency keys are used to ensure there are no duplicate payments. Full transaction history is kept for each payment made under Regulation J guidelines.

Module 5: Pay by Bank and request for payment

The A2A payment capability, which uses both FedNow and RTP, offers account-to-account payments at zero cost for B2B customers. RFPs are made possible where payments can be made on an invoice basis.

  • 5

    Integrated Core Modules

  • 100%

    Automated Smart Routing

  • ML

    Pre-Payment Fraud Layer

  • Business Architecture
  • Team
  • Development in Detail
  • Technology Stack
  • The architecture covers five domains across the full payment lifecycle.

    Rail connectivity: Registers users to access FedNow through FedLine and RTP through TCH. Uses Apache Kafka to deliver payment and settlement messages in real time. Has an active database of participating banks to ensure the payee can be reached through alternative rails or ACHs.

    Payment orchestration: Processes each payment in Spring Boot and routes it according to criteria such as payment amount, payment type, urgency, and cost. Bank availability and routing decisions are cached in Redis to reduce latency over 100% of transaction volume.

    ISO 20022 translation: Bidirectional ACH/ISO 20022 message conversion via Spring Boot with normalized schemas stored in PostgreSQL for auditing purposes. Covers compliance with Fedwire requirements and message enrichment with remittance information not available in the ACH.

    Risk and fraud: Validation for account, velocity, and behavioral happens in Spring Boot prior to completing each transaction. Duplicate transactions are avoided through Redis using idempotency keys. The Regulation J audit log is stored in PostgreSQL.

    Pay by Bank: Provides A2A payments and request-for-payment flows on FedNow and RTP via Spring Boot, with Kafka delivery of settlement confirmations downstream to business logic. Provides B2B customers with a cardless, feeless payment collection solution.

  • The project required US payments expertise, multi-rail connectivity, and compliance engineering:

    Project Manager: US payments domain, delivery coordination between rail connectivity and routing work streams

    Solution Architect: Payment orchestration architecture, dual-rail strategy, ISO 20022 design

    Payments Engineer: FedNow and RTP connectivity, ISO 20022 implementation, TCH and FedLine API integration

    Backend Engineers (2): Routing engine, translation layer, fraud pre-validation, ACH integration

    Data Engineer: Payment analytics, routing optimization, settlement reporting

    Security Engineer: Pre-payment fraud detection, Regulation J compliance, SOC 2 controls

    QA Engineer: Payment flow testing, ISO 20022 conformance, routing logic validation, load testing

    DevOps Engineer: AWS infrastructure, Kubernetes, CI/CD, monitoring

  • Five additive stages were undertaken to move the platform from an assessment state to full production.

    1. Assessment and design
    The assessment of the current state of the ACH infrastructure involved an evaluation of transaction flows, integration points, and bank gaps. Both the dual-rail design and the gap analysis of ISO 20022 took place prior to the architecture design.

    2. Rail connectivity 
    FedNow setup via FedLine and RTP onboarding via The Clearing House ran in parallel. There was a database to check whether a particular recipient was reachable through any one of the three rails. 

    3. Smart routing engine 
    Routing policies were created based on the criteria of amount, type, urgency, and cost. Bank availability and failover policies were A/B tested against transaction traffic before deployment.

    4. ISO 20022 translation 
    A two-way translation procedure was undertaken by using the message templates for FedNow and RTP.  Testing was also done on enriched data mapping related to remittance and invoice referencing.

    5. Fraud layer and Pay by Bank 
    Pre-payment validation and human review occurred simultaneously before going into production. Regulation J audit trail and dispute workflow were created. Pay by Bank and Request for Payment capabilities went into production for both rails.

  • The selected stack enabled real-time event processing, regulatory-compliant audit trail capability, and AI software development:

    Core services: Java 17, Spring Boot, microservices architecture

    Event streaming: Apache Kafka for payment events, routing decisions, settlement confirmations

    Payment standards: ISO 20022 migration, FedNow API (FedLine), RTP API (TCH), NACHA ACH

    Database: PostgreSQL (transactional), Redis (idempotency keys, routing cache)

    Cloud: AWS — EKS, RDS, MSK for Kafka, CloudWatch

    Security and compliance: Pre-payment fraud detection, Regulation J audit trail, SOC 2-ready controls, AWS IAM, CloudTrail

    DevOps: Kubernetes, blue-green deployment, GitHub Actions CI/CD

Value Delivered

Jelvix delivered dual-rail instant payments across the entire transaction volume without changes to the core infrastructure.

  1. Real-time payment processing

    The platform added FedNow and RTP to its existing ACH stack, with no core system replacement and no downtime.

  2. Instant settlement capability

    B2B clients got the FedNow and RTP settlement they were asking for, removing the churn risk that was building as competitors pulled ahead.

  3. Automated rail selection

    Every transaction is automatically routed to the optimal rail with no manual routing decisions across 30,000+ daily transactions.

  4. Enriched payment data

    The introduction of ISO 20022 enabled ACH to automate reconciliation, invoicing, and treasury management.

Project Results

Full dual-rail coverage was delivered across the client’s entire transaction volume with no migration of existing systems.

  • Every transaction is routed to the fastest available settlement method, versus 40% with partial instant rail integrations.

  • Instant-eligible transactions via FedNow or RTP payments instead of waiting 2-3 days on ACH.

  • An orchestration layer added on top of live ACH infrastructure with no transaction interruption.

  • Platform deployed additively with core ACH stack, ERP integrations, and treasury tooling untouched.

  • Fedwire migration requirement closed with enriched remittance data available for reconciliation and treasury automation.

  • A2A payment capability for FedNow and RTP allows B2B customers to receive money without any card network charges.

  • Seconds
    Settlement Time

  • Zero
    Core Downtime

  • A2A
    Pay by Bank Live

B2B payment platform

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