The Federal Reserve’s instant payments system, FedNow(SM), which will enable bill payments, money transfers, and other consumer activities to move faster at lower cost, will launch in July.
Starting the first week of April, early adopters will complete a customer testing and certification program informed by FedNow Pilot Program feedback to prepare for sending live transactions through the system, said a Fed news release.
"We couldn't be more excited about the forthcoming FedNow launch, which will enable every participating financial institution, the smallest to the largest and from all corners of the country, to offer a modern instant payment solution," Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive said in the release. "With the launch drawing near, we urge financial institutions and their industry partners to move full steam ahead with preparations to join the FedNow Service."
The FedNow Service will enable financial institutions to deliver end-to-end faster payments services 24/7/365 rather than limit transactions to traditional banking hours.
"With the FedNow Service, the Federal Reserve is creating a leading-edge payments system that is resilient, adaptive, and accessible," Tom Barkin, president of the Federal Reserve Bank of Richmond and FedNow Program executive sponsor, said in the release. "The launch reflects an important milestone in the journey to help financial institutions serve customer needs for instant payments to better support nearly every aspect of our economy."
In addition to preparing early adopters for the July launch, the Federal Reserve continues to engage a range of financial institutions and service providers to complete the testing and certification program and implement the service throughout 2023 and beyond. Montgomery noted that availability of the service is just the beginning, and growing the network of participating financial institutions will be key to increasing the availability of instant payments for consumers and businesses across the country.
For the majority of banks not in the current pilot and testing, it’s time to talk to your providers about getting in the FedNow queue. In the meantime, FedNow questions can be directed to your Fed rep and NEACH will be providing updates.
AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.