Federal Reserve’s FedNow Service for instant payments is now live
The Federal Reserve has announced that its new system for instant payments, the FedNow Service, is now live. Banks and credit unions of all sizes can sign up for and use this tool to instantly transfer money for their customers, any time, any day of the year.
To start, 35 early adopting banks and credit unions, as well as the U.S. Department of the Treasury’s Bureau of the Fiscal Service, are ready with instant payments capabilities via the FedNow Service. In addition, 16 service providers are ready to support payment processing for banks and credit unions.
However, the list of early adopters with instant payment capabilities does not include any Puerto Rico-based financial institutions.
“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.”
When fully available, instant payments will provide benefits for consumers and businesses, such as quick access to funds, or just-in-time payments to 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.
