What is 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.
When does the FedNow Service launch?
The FedNow Service will launch July 2023 and will be deployed in phases so that the initial service can be launched expeditiously with additional features and enhancements released in stages after the initial launch. This phased approach will allow for adjustments and improvements in response to industry needs or changes in technology.
What will the initial launch of the FedNow Service include?
The initial FedNow Service launch will include:
- Core clearing and settlement capabilities to support a range of transaction types and use cases
- Use of the widely accepted ISO® 20022 standard and other industry best practices to support interoperability
- Features that will support flexible adoption, including support for the use of service providers and correspondents and an option to enroll as a “receive-only” participant
- Value-added features including request-for-payment capability and tools to support participants in their handling of payment inquiries, reconcilements and certain exceptions
- 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
- Features to support payment integrity and data security and tools to help financial institutions combat fraud, such as a transaction value limit and reporting features
- A liquidity-management tool that will allow participants and others to transfer funds to each other to support the liquidity needs of instant payments
After the initial service launch, we hope to offer additional features related to fraud prevention, error resolution and case management. We will continue to explore other features, including potential support for person-to-person payments that use the alias of a receiver. Ongoing engagement with the industry, including a pilot program, will play a role in our implementation plans.
Who will be eligible to participate in the FedNow Service?
As with current Federal Reserve Bank services, the FedNow Service will be 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 will be able to designate a service provider or agent to submit or receive payment instructions on their behalf. Participants will also be able to 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.
How do I sign up to receive updates about the FedNow Service?
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.
How do I get involved with informing the evolution of the FedNow Service?
The Federal Reserve will continue to engage with industry stakeholders throughout the development process for the FedNow Service in order to understand, on an ongoing basis, the needs of depository institutions, other industry stakeholders and the public. The Federal Reserve Banks have established the new FedNow Community, which represents a variety of expertise, viewpoints, and industry segments and members, that will help inform the service design and provide insights on readiness for instant payments. Visit our FedNow Community (Off-site) to learn more and get involved.
For more answers to commonly asked questions, visit Asked and answered: The FedNow Service.