Common questions about the FedNow^® Service

The FedNow Service is a new instant payments 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. Financial institutions and their service providers can use the service to provide innovative instant payment services to customers, and recipients have full access to funds immediately, allowing for greater financial flexibility when making time-sensitive payments.

The FedNow Service includes the following features and capabilities:

• Core clearing and settlement capabilities to support a range of transaction types and use cases, including request for payment.
• Use of the widely accepted ISO^® 20022 standard and other industry best practices to support interoperability
• Features that support flexible adoption, including support for the use of service providers and correspondents, and an option to enroll as a “receive-only” participant
• Features to enhance the experience for financial institutions by broadcasting participant availability to support their transition to 24x7x365 operations, a user interface to support data needs and the ability to have access to balance information on weekends
• Informational application programming interfaces (APIs) that offer financial institutions and their service providers a modern way to exchange data with a seamless request and response.
• Features to support payment integrity and data security, such as message authentication and data encryption.
• Tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions.
• Liquidity management tools, such as the liquidity management transfer capability that allows participants and others to transfer funds to each other to support the liquidity needs of instant payments, or the correspondent net send limit capability that supports correspondents in managing their master account balances while protecting their respondents.
• Tools that complement financial institutions’ fraud risk management practices and provide participants with an additional layer of protection against fraud, including:
  • The ability to reject transactions to or from specific accounts at other financial institutions.
  • Network and participant transaction limits.
  • Configurable account activity thresholds that allow participants to customize value and velocity thresholds by customer segment to fit their unique business needs and risk tolerance.

In the future, we hope to offer additional features related to fraud mitigation and error resolution management. We will continue to explore other features, including additional APIs for a range of scenarios and enhanced reporting capabilities. Ongoing engagement with the industry plays an important role in our implementation plans.

As with current Federal Reserve Bank services, the FedNow Service is available to depository institutions eligible to hold accounts at the Federal Reserve Banks under applicable federal statutes and Federal Reserve rules, policies and procedures. Participants can designate a service provider or agent to submit or receive payment instructions on their behalf. Participants can also settle payments in the account of a correspondent, if they choose to do so. Merchants, consumers, or non-bank payment service providers can access the service through depository institutions as they do today with other payment systems.

Head over to our contact page to subscribe to the latest updates about the FedNow Service. We send regular emails with new information about our service design, features, important timings and participation availability.