in advertisement The Federal Reserve revealed Thursday morning that its instant payment system, FedNow® Service, has officially gone live. This tool aims to enable banks and credit unions of all sizes to facilitate instant money transfers for their customers. The Fed claims that FedNow transactions can be executed 24/7, 365 days a year.
To start, 35 banks and credit unions, along with the US Treasury’s Bureau of Financial Services, are among those already equipped to handle payments through FedNow. Moreover, there is a group of 16 service providers willing to provide payment processing support to banks and credit unions.
“The Federal Reserve created FedNow to help make everyday payments faster and more convenient over the coming years,” said Federal Reserve Chairman Jerome Powell. “Over time, as more banks choose to use this new tool, the benefits for individuals and businesses will include enabling a person to receive a paycheck immediately, or enabling a business to have immediate access to funds when the bill is paid.”
When asked if FedNow is trying to replace cash, and if it is a central bank digital currency (CBDC) or not, the Fedadvertiser “No. The FedNow Service is not tied to a digital currency. The FedNow Service is a payment service that the Federal Reserve provides to banks and credit unions to transfer money to their customers. It is like other federal payment services, such as Fedwire and FedACH. The FedNow Service is not a form of currency nor a step toward eliminating any form of payment, including cash.”
A comprehensive list of early adopters already equipped with pay as you go capabilities can be found in an attachmentdocument. More information can be found at the Federal Reserve Financial Services website.