How the FedNow® Service is helping transform disaster relief payments: Insights from early adopters
In 2025, the FedNow Service began playing a critical role for those impacted by natural disasters. When the U.S. Treasury’s Bureau of the Fiscal Service added the FedNow Service (Off-site) to its Digital Payout Program (Off-site), it enabled government agencies like FEMA to send payments to individuals and organizations instantly.
Digital Payout recipients can choose how to receive their funds (once a FEMA disaster relief claim is approved, for example), including an option to instantly transfer funds to their bank or credit union account. If the recipient’s financial institution participates on the FedNow network the funds are sent immediately, ensuring the money is ready to use right away. This instant option makes the payout process fast and straightforward.
Financial institutions enabled to receive these instant disbursements have seen tangible results. The experiences of three financial institutions — CB&S Bank (Off-site), Educators Credit Union (Off-site) and PNC Bank (Off-site) — and their account holders offer valuable insights into the ways instant disbursements are reshaping emergency relief efforts and boosting the industry-wide case for instant payment adoption.
The human impact: Immediacy when it matters most
The difference between receiving approved funds instantly versus days later can be profound for account holders following a crisis. When Milwaukee experienced catastrophic flooding in August 2025, some Educators Credit Union members faced immediate need for basic necessities.
“For Milwaukee-area residents, this was a once-in-a-lifetime flood,” said Lori Gorkowski, chief payments officer at Educators Credit Union. “Some of our members lost personal property and housing but had no substantial funds available to secure food and shelter. Because our credit union uses the FedNow Service, members were able to receive FEMA funding directly into their accounts without waiting additional days or weeks for a check in the mail. The relief that provided them was more than just monetary.”
For CB&S Bank, the relief that an instant disbursement offers to their customers is critical. “These payments allow our customers to access funds immediately for their urgent needs, especially at a time when access counts,” said Max Raybon, ACH/Treasury Management Support Manager of CB&S Bank. “In the aftermath of a disastrous situation, our customers have to worry about one less thing.”
Advantages for financial institutions
Beyond serving customers in a crisis, receiving instant government payments offers concrete benefits for financial institutions leveraging the FedNow Service. The instant payments infrastructure provides a competitive advantage for banks and credit unions while strengthening community ties.
“We can better serve our customers by removing delays and, in turn, strengthening the communities we serve,” Raybon said. “The FedNow Service provides a secure and efficient payment option for our bank to receive instant transactions and enhance our customer experience. It allows us to offer innovative value-added services and keeps CB&S Bank competitive in the digital landscape.”
Enhanced security is another benefit of FedNow payments, which some financial institutions consider a significant advantage over traditional payment methods. “Instant payments are not only convenient, but also safe and secure,” Educators’ Gorkowski said. “Checks can get lost in the mail or be intercepted and counterfeited. We can avoid that risk with instant payments delivered directly in our members’ accounts.”
Encouraging a strategic move toward instant payments
For some financial institutions, government agencies’ adoption of the FedNow Service has validated the strategic choice to participate in the service. PNC’s FedNow adoption was spurred in part by the move toward instant disaster relief payments.
“We ultimately chose to implement the FedNow Service when the U.S. Treasury signaled that it would leverage the service to issue disaster relief payments,” shared Sarah Billings, executive vice president and head of global payments at PNC. “As a bank with a large retail franchise, we can’t imagine not giving our clients immediate access to those funds when they need them most. And our instinct was proven right — one of our first three FedNow payments was a disaster relief payment.”
With an eye toward the future, financial institutions like CB&S anticipate that instant government disbursements signify a broader transformation that banks and credit unions should prepare for. “Seeing government agencies leveraging the FedNow Service validates that this is an important payment system, for our bank and beyond,” Raybon said. “Instant payments will assist us in attracting and retaining customers and support our strategic push for digital payments. We also anticipate that, over time, we could see more government payments move to the FedNow Service, expanding the share of instant government disbursements exponentially.”
Advice for financial institutions considering the FedNow Service
For financial intuitions still evaluating if or when they might join the FedNow Service, these early adopters offer straightforward advice: Don’t wait.
“Cutting-edge digital services are becoming an essential part of what people expect from their traditional financial institution,” Gorkowski said. “Account holders typically associate these services with national banks. Educators Credit Union is proof that credit unions can use this technology while remaining true to the local, personal brand we are known for. If your current digital strategy doesn’t include the easy instant payments that the FedNow Service offers, you may quickly be left behind.”
CB&S Bank echoes the importance of quick action, especially when enabling instant payments to support receiving disaster relief funds. “I would say don’t wait,” Raybon said. “If you or your core provider has the technology available to receive instant payments, you should seriously consider it.”
As government agencies continue to leverage the FedNow Service — and look to enable other types of disbursements in the future — instant payments are increasingly becoming essential. For those enabled to receive FedNow transactions, disaster relief payments have provided an early proving ground. For those considering adoption, these payments offer a glimpse at what their customers and members may soon consider a standard offering.
The Innovation Spotlight series demonstrates the ways financial institutions, certified service providers and ecosystem providers are driving innovation with the FedNow Service. To learn more about innovative FedNow Service use cases, read our previous Innovation Spotlight articles.