The Federal Reserve announced July 20 that its new system for instant payments, the FedNow Service, is now live. Banks and credit unions can sign up and use this tool to instantly transfer money to their customers. Money transfers can be done 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,” Federal Reserve Chair Jerome Powell said. “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.”
Instant payments will provide substantial benefits for consumers and businesses. For example, individuals can instantly receive their paychecks and use them the same day, while small businesses can more efficiently manage cash flows without processing delays.
In the year ahead, 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.
The FedNow Service operates alongside other longstanding Federal Reserve payment services such as Fedwire and FedACH.
The Federal Reserve is committed to working with the more than 9,000 banks and credit unions across the U.S. to support the widespread availability of this service. Right now, it is in use by 35 early adopting banks and credit unions, as well as the U.S. Department of the Treasury’s Bureau of the Fiscal Service. In addition, 16 service providers are ready to support payment processing for banks and credit unions.
More information on how to sign up is available at the FedNow web site at www.FRBServices.org.