Federal Reserve goes live with instant payments system, FedNow Service

The Federal Reserve has gone live with its new system for instant payments, the FedNow Service.

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.

Federal Reserve Chair Jerome H. Powell said: “The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient. 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.”

The Fed has already onboarded 35 early-adopting banks and credit unions, as well as the U.S. Department of the Treasury’s Bureau of the Fiscal Service. These 37 entities are ready with instant payments capabilities via the FedNow Service and 16 service providers are ready to support payment processing for banks and credit unions.

Send instant payments via mobile app, website, and other interfaces

The Fed argues that 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.

The FedNow Service is an interbank payment system that 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 United States to support the widespread availability of this service for their customers over time, the central bank stated.

FedNow allows participating banks and credit unions to send and receive transactions within seconds on behalf of their customers — 24 hours a day, seven days a week.

Below, a list of financial institutions that are currently live on the service, as well as financial institutions serving as settlement and liquidity providers. Also listed are certified service providers that have completed testing certification to support payment processing for participants.