United Bankers Bank, a correspondent financial institution serving more than 1,000 community banks across the U.S., recognized that smaller banks often lack the internal resources of larger institutions for in-house development or complex integrations. To address this, UBB partnered with Pidgin, a real-time payments platform provider, to provide the necessary infrastructure for its network of banks to offer instant payment services via FedNow, RTP or the Automated Clearinghouse. The result has since earned it recognition from American Banker as an Innovation of the Year. Pidgin is designed as a secure, real-time payments platform that acts as the “connective tissue and plumbing” for financial institutions. It enables banks to offer instant payment services by routing transactions through FedNow, RTP and ACH, providing a comprehensive solution for diverse payment needs. The platform offers 24/7/365 access, ensuring payments can be sent and received at any time, with funds posted directly to the customer’s account for immediate availability. “The UBB–Pidgin partnership directly addresses many of the barriers community banks face — simplifying integration, reducing costs and providing the support smaller institutions often lack,” Perry said. A key security feature of Pidgin is it’s designed to keep funds within the financial institution, rather than routing them through a third-party holding account or virtual wallet. This approach enhances security, reduces interbank settlement risk and strengthens customer retention by maintaining the bank as the primary financial custodian, according to the fintech. Pidgin supports a wide range of transaction types for both consumers and businesses, including peer-to-peer (P2P) transfers, consumer-to-business (C2B) payments for services or e-commerce, business-to-consumer (B2C) disbursements like immediate payroll or insurance payouts, and business-to-business (B2B) payments for on-demand supplier invoices. The platform also facilitates government and municipal payments, such as instant tax payments or refunds. By supporting both “receive” and “send” capabilities, Pidgin allows banks to fully leverage real-time payments for competitive advantage. United Bankers Bank, as a correspondent institution, provides its network of community banks with access to technologies without competing with its member banks. UBB initiated a pilot program for faster payments with Pidgin approximately one year before the official launch of the FedNow service. This involved thorough testing with a customer bank, including liquidity management transfers and other real-time transaction capabilities. This preparatory phase allowed UBB to seamlessly integrate the solution, enabling them to go live with Pidgin the day after FedNow service officially launched. Since going live, UBB has observed a consistent increase in the number of partner banks participating in the FedNow service through the Pidgin platform, growing by 5%-10% each month. UBB anticipates this trajectory to accelerate as more institutions recognize the benefits of the new real-time rail. One thing that the UBB-Pidgin partnership does not solve, according to Perry, is the demand gap.
In markets with older or rural customer bases, customers may not feel the urgency of real-time payments, according to Perry. As such, the pressure on these customers’ banks to adopt remains low, even if the technology is now within reach. “Nevertheless, for small banks that want to modernize their payments infrastructure and stay competitive, real-time payments would simply not be possible without this kind of collaboration,” Perry said. The UBB-Pidgin project underscores the critical role of partnerships with fintechs in enabling traditional financial institutions, particularly smaller ones, to adopt advanced technologies efficiently and cost-effectively. The initiative also serves as a blueprint for how correspondent banks can effectively empower smaller financial institutions to adapt to the rapidly evolving payments landscape — namely, with a fintech partner. The UBB-Pidgin partnership also gives community banks a way to stay relevant in their local economies, offering modern financial services that meet the growing demands of both consumers and businesses.