The Federal Reserve has launched a new instant payments system called FedNow. FedNow will allow banks and other financial institutions to send and receive payments instantly, 24 hours a day, 7 days a week.
This will be a major improvement over the current system, which can take several days for payments to clear.
The Federal Reserve Services Org states, “The FedNow Service is a new instant payment infrastructure developed by the Federal Reserve that allows financial institutions of every size across the U.S. to provide safe and efficient instant payment services.”
“Through financial institutions participating in the FedNow Service, businesses and individuals can send and receive instant payments in real time, around the clock, every day of the year,”it adds.
The FedNow system is a secure and reliable system that is protected by multiple layers of security.
It is also designed to be interoperable with other payment systems, which will allow businesses and consumers to send and receive payments across different platforms.
FedNow is designed to be used by businesses and consumers for a variety of payments, such as:
- Sending money to friends and family
- Making bill payments
- Paying for goods and services
- Transferring money between bank accounts
The service was released on July 20, 2023, in partnership with 35 financial institutions. Here is a list of all the financial institutions:
| Financial Institution Name | City | State |
| 1st Source Bank | South Bend | Indiana |
| Adyen | San Francisco | California |
| Avidia Bank | Hudson | Massachusetts |
| BNY Mellon | New York | New York |
| Bridge Community Bank | Mechanicsville | Iowa |
| Bryant Bank | Birmingham | Alabama |
| Community Bank of the Bay | Oakland | California |
| Consumers Cooperative Credit Union | Gurnee | Illinois |
| Corporate America Credit Union | Irondale | Alabama |
| Eastern Corporate Federal Credit Union | Burlington | Massachusetts |
| First Internet Bank of Indiana | Indianapolis | Indiana |
| Global Innovations Bank | Kiester | Minnesota |
| HawaiiUSA Federal Credit Union | Honolulu | Hawaii |
| INB | Springfield | Illinois |
| JPMorgan Chase | New York | New York |
| Mediapolis Savings Bank | Mediapolis | Iowa |
| North American Banking Company | Roseville | Minnesota |
| Peoples Bank | Clifton | Tennessee |
| Pima Federal Credit Union | Tucson | Arizona |
| Salem Five Bank | Salem | Massachusetts |
| Star One Credit Union | Sunnyvale | California |
| United Bankers' Bank | Bloomington | Minnesota |
| U.S. Bank | Cincinnati | Ohio |
| U.S. Department of the Treasury's Bureau of the Fiscal Service | Washington, D.C. | |
| Veridian Credit Union | Waterloo | Iowa |
| Wells Fargo Bank, N.A. | San Francisco | California |
Source: FRBservices.org
Ken Montgomery, 1st Vice President, of the Federal Reserve Bank of Boston and FedNow program executive said, “Launching the FedNow Service is an important step in the journey toward advancing instant payments throughout across the United States.”
“We are excited to see how financial institutions build and innovate on the service over time to meet the growing demand of their customers for instant payments,” he added.
In conclusion, The FedNow system is a major step forward for the US payments system. It will make it easier and faster for businesses and consumers to send and receive money. This will improve efficiency and economic activity.
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