MSU Federal Credit Union recorded 643% FedNow growth

Michigan State University Federal Credit Union recorded a 643% increase in month-to-month FedNow instant payment transactions between August 2023 and 2024, frbservices.org reported. Nicole Dilts, the credit union’s vice president of commercial solutions, detailed the volume growth, operational efficiencies, and upcoming member services in a profile published December 18, 2024.

Volume growth at MSU Federal Credit Union

MSU Federal Credit Union launched live operations on the FedNow Service in August 2023, initially anticipating low transaction volumes following the rollout. Comparing the highest monthly volume from 2023 to the peak volume in 2024 revealed a 643% expansion in transactions, according to Dilts. The institution currently participates in the network on a receive-only basis while preparing to activate send capabilities. Enabling those send functions in 2025 will give members an additional payment rail choice depending on how quickly they need funds to settle.

Members expect instant payments as operations become more efficient

Consumer awareness of instant payments shifted significantly over a two-year period, transforming from an unfamiliar concept into an active expectation among members. Dilts noted that members now contact the credit union to inquire about settlement timelines when transactions process through payment rails other than the FedNow Service. On the operational side, instant payments require minimal staff interaction, creating overhead reductions while improving transaction speed, security, transparency, and accessibility.

Gig worker use cases driving transaction volume

University students, alumni, and faculty comprise a large portion of the membership base at the East Lansing, Michigan-based credit union, which also serves Oakland University and select community groups. Many students work as rideshare or delivery drivers, creating a steady demand to access earnings quickly. These gig workers drive the majority of the current instant payment volume by utilizing the FedNow Service to access pay instantly. Account-to-account transfers represent the remaining major category for early transaction volume.

Future expansion into send capabilities

MSU Federal Credit Union plans to introduce send capabilities in 2025 to target specific financial use cases. Indirect auto loan funding is one primary target, allowing dealerships to transmit loan opportunities directly to the credit union for immediate disbursement via the FedNow Service. Student loan refunds and emergency insurance payouts represent additional future targets designed to replace traditional checks and ACH transfers with rapid, direct account funding.

Dilts advises credit unions to prioritize preparation and alignment

Dilts advised other credit unions exploring instant payments to prioritize preparation and stakeholder alignment before deployment. Assessing existing technological infrastructure helps identify technology gaps that must be bridged for a smooth integration. Dilts pointed to these preparatory steps as essential for a smooth implementation.