Testing for Real-Time Payments: What You Need to Know

Blog· 4min March 21, 2023

Payment testing is a crucial yet challenging aspect of the banking industry. Insufficient testing can result in severe consequences, so banks must examine the entire end-to-end process to tackle potential risks and system vulnerabilities. Initiating this process early is critical. However, the escalating complexity of payment testing has led many institutions to inadvertently downplay its importance.

Testing should be center stage with the launch of FedNow

With FedNow set to launch in July, the US payments landscape is set to embrace the world of real-time payments. The ability for banks to offer real-time payments will not only define its strategic direction but also will enhance its security, operational stability and power to adapt to changing customer expectations. However, failure has also never been more visible in this new world. When a batch system goes down there are workarounds and back-end solutions that can hide this from the end users, but when an online, real-time payment system is not working customers know immediately and so does everyone else.

This is where testing, which is sometimes seen as an afterthought can make a huge difference to the end result. Real-time payments are a perfect opportunity to rethink testing strategies – not just in ensuring a faster, frictionless delivery, but also a more efficient one.

Why is testing important?

Payments are an area where there is little room for compromise. Whether it is sending or receiving the risk of bad publicity, market share or customer churn is a serious concern for banks. This is even more of an issue as we look at the ever-growing number of new entrants into the payments ecosystem, some of who have been born into a real-time world and so not being prepared to handle real-time payments efficiently and correctly from day one can have serious impacts. Add to this rulebook and scheme changes that need to be accounted for it’s easy to see why testing will be key in helping provide a competitive edge.

The complexity of testing RTP payments

Real-time payment systems need to manage instantaneous transaction processing, process feedback and to interface with both existing back-end systems and new APIs - all the while needing to be available 24/7 as well as adhering to complex business rules.

What are the different approaches to testing real-time payments?

Now, when it comes to testing real-time payments, there are a few different approaches that banks can take:

Sandbox testing

This involves creating a simulated environment that mimics the live payment system. Banks can use this environment to test different scenarios, such as varying transaction amounts, different payment types, and so on. Sandbox testing is a great way for banks to test their payment systems in a safe and controlled environment before going live.

Form3's instant payments sandbox environment provides a controlled environment that supports all use cases and certification scenarios, making testing even more efficient.

User acceptance testing (UAT)

UAT involves testing the payment system from the end-user's perspective. This can involve testing the payment process from start to finish, including things like entering payment details, verifying transactions, and so on. UAT is important because it allows banks to identify any usability issues or bugs that might impact the end-user experience.

Regression testing

This involves retesting the payment system after any changes or updates have been made. Regression testing is important because it helps to ensure that any changes made to the payment system do not negatively impact the system's performance or functionality.

Load testing

This involves testing the payment system under heavy loads to ensure that it can handle high volumes of transactions without slowing down or crashing. Load testing is important because it helps to identify any performance issues or bottlenecks in the payment system.

Overall, testing real-time payments is a critical step for banks to ensure that their payment systems are secure, reliable, and user-friendly. By using a combination of sandbox testing, UAT, regression testing, and load testing, banks can help to ensure that their payment systems are ready to handle the demands of real-time payments.

Are the testing requirements for real time payments systems similar across all banks?

The testing process for a real-time payments system can vary depending on the specific system and the bank that is implementing it. While there are some common testing approaches that are used across the industry, such as sandbox testing and user acceptance testing, the specifics of each testing process can be unique to each bank.

This is because each bank may have different requirements and specifications for their real-time payments system. For example, some banks may require additional security measures or have different transaction limits than other banks. Additionally, each bank may have different internal systems and processes that they need to integrate with their real-time payments system, which can also impact the testing process.

Apart from the disparities among banks, there are also variations related to the specific use cases being tested. For instance, when testing account-to-account (A2A) traffic, the primary focus may be on evaluating message exchanges and transaction posting. However, for a bill payment use case, it might be essential to assess the request for payment flow, authorization strategy, and their integration with the payment process.

While there are some common testing approaches that are used across the industry, the testing process for a real-time payments system can vary depending on the specific system and the bank that is implementing it. Each bank may have different requirements and specifications for their system, which can impact the testing process. However, industry-wide standards and guidelines can provide a framework for banks to follow when testing their real-time payments systems.

Why is the testing phase for FedNow implementation key to long term success?

Thorough testing is crucial for banks as they prepare for the much-anticipated launch of real-time payments (RTP) in the US. With the implementation of FedNow, financial institutions have the opportunity to stay at the forefront of innovation and meet the evolving demands of their customers. By rigorously examining their systems and processes, banks can ensure they are well-equipped to handle the complexities and nuances of RTP once it goes live.

Real-time payments, though increasingly popular, are still relatively new and governed by a set of rules that are not yet firmly established. As a result, banks must navigate this uncharted territory with care and precision. Comprehensive testing not only facilitates a seamless migration to RTP but also helps maintain long-term cost efficiency.

By investing in a robust testing strategy, such as the one offered by Form3, banks can confidently adopt and integrate real-time payment systems, ultimately enhancing their competitive edge in the rapidly evolving financial landscape.


As the launch of FedNow ushers in the era of real-time payments, it is crucial for banks to prioritize comprehensive testing strategies without delay. By employing a multifaceted approach – including sandbox testing, UAT, regression testing, and load testing – banks can identify risks and vulnerabilities, ensuring secure, reliable, and user-friendly payment systems. Embracing industry best practices and staying informed about evolving standards is vital in this rapidly changing landscape.

Financial institutions must act swiftly to secure their competitive advantage and successfully navigate the real-time payments revolution. Leveraging solutions like Form3's instant payments testing platform can provide banks with the tools and resources necessary to streamline their testing processes, mitigate risks, and ensure a smooth transition to real-time payments.

Form3's extensive experience and comprehensive testing solution can help banks stay ahead in the fast-paced world of real-time payments. By offering a robust, automated, and efficient testing environment, Form3 allows financial institutions to focus on delivering seamless and secure real-time payment experiences to their customers.

Step into the future of real-time payments testing with our US Payments Simulator.

Written by

Miriam Sheril
Miriam Sheril Head Of Product - US

Miriam Sheril is the Head of Product in the US at Form3 with responsibility to build out and enhance Form3’s product capabilities in the US, focusing real time payments and other rails such as the Federal Reserve’s FedNow service and The Clearing House’s RTP service. Miriam comes with more than 13 years’ experience in financial services, where she focused on product and software development and management. She joins Form3 from the Federal Reserve Bank, where she was most recently the FedNow Core Product Manager Lead AVP, responsible for the design and build of the FedNow product since its inception.