Experience the revolution in financial transactions with the Federal Reserve's FedNow® Service.
The Federal Reserve announced on Thursday the launch of its new system for instant payments, the FedNow® Service. The system enables banks and credit unions of all sizes to offer instant money transfer services to their customers at any time, any day of the year. The tool aims to facilitate more efficient everyday payments and offer benefits such as immediate paycheck receipt and instantaneous access to funds when an invoice is paid.
"The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient," said Federal Reserve Chair Jerome H. Powell. "Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid."
Initially, 35 banks and credit unions, as well as the U.S. Department of the Treasury's Bureau of the Fiscal Service, are prepared to offer instant payments via the FedNow Service. Additionally, 16 service providers are ready to support payment processing for these institutions. The list of early adopters includes banking giants like JPMorgan Chase and Wells Fargo Bank, N.A., among others.
The FedNow Service has been designed as an interbank payment system to operate alongside other longstanding Federal Reserve payment services such as Fedwire® and FedACH®. The goal is to facilitate instant payments and provide benefits to consumers and businesses alike, such as rapid access to funds and efficient management of cash flows in bank accounts.
When the service is fully available, customers of participating banks and credit unions should be able to use their financial institution's mobile app, website, and other interfaces to send instant payments securely and quickly. The Federal Reserve is committed to working with the more than 9,000 banks and credit unions across the country to support the widespread availability of this service over time.
The introduction of the FedNow Service represents a significant shift in the speed and convenience of financial transactions, providing individuals and businesses with immediate access to funds and facilitating the management of cash flows. This will enable businesses to operate more efficiently and individuals to have more flexibility in managing their finances. The Federal Reserve's commitment to promoting this service signifies a notable advancement in the modernization of the financial system.
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