Last week, the U.S. Federal Reserve (the Fed) announced that 57 financial institutions (banks and service providers) have been certified to utilize "FedNow" after it launches in late July.  FedNow is the first government-created and backed platform that will allow businesses and individuals to instantly send and receive payments in real time (24/7 and 365 days) through any U.S. financial institution that offers the FedNow service. Payments between banks typically take one to three business days, requiring clearing and settlement. However, FedNow will make clearing and settlement occur within seconds, according to the Fed.

FedNow is not the first real-time payment (RTP) service, but it is expected to expand the reach of instant payment services nationwide especially for small businesses and underserved communities, as the Fed provides access to its current payment services to more than 10,000 banks and credit unions. 

The Fed touted the launch of FedNow as a success stating:

“With the FedNow Service, the Federal Reserve is creating a leading-edge payments system that is resilient, adaptive and accessible,” said Tom Barkin, president of the Federal Reserve Bank of Richmond and FedNow Service program executive sponsor. “The launch reflects an important milestone in the journey to support financial institutions as they serve customer needs for instant payments to better support nearly every aspect of our economy.”

More to follow as the FedNow service is deployed.