On July 20, 2023, the Federal Reserve announced (Off-site) that its new system for instant payments, the FedNow Service, is now live. Banks and credit unions of all sizes can sign up and use this tool to instantly transfer money for their customers, any time of the day, on any day of the year.
“The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient,” said Federal Reserve Chair Jerome H. Powell. “Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid.”
At launch, 35 early-adopting banks and credit unions, as well as the U.S. Department of the Treasury’s Bureau of the Fiscal Service, were ready with instant payments capabilities via the FedNow Service. In addition, 16 service providers were ready to support payment processing for banks and credit unions.
When fully available, instant payments will provide substantial benefits for consumers and businesses, such as when rapid access to funds is useful, or when just-in-time payments help manage cash flows in bank accounts. For example, individuals can instantly receive their paychecks and use them the same day, and small businesses can more efficiently manage cash flows without processing delays.
Over the coming years, customers of banks and credit unions that sign up for the service should be able to use their financial institution’s mobile app, website and other interfaces to send instant payments quickly and securely. See what early adopters are saying about the FedNow Service launch and what it means for their customers in the video below.
Financial institutions interested in discussing how they can adopt the FedNow Service can contact their Federal Reserve relationship manager to learn more.