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The Federal Reserve could launch its FedNow real-time payments service as early as tomorrow, sources tell Digital Transactions News. The network, which has been under development for nearly four years, represents the regulator’s first effort to create a nationwide network for instant payments, a service that other countries, and at least one other major U.S. processor, have developed over the past decade.
The Fed earlier said FedNow would emerge this month, but has not announced a specific date. Bankers and other participants are under non-disclosure agreements regarding the launch and so are unable to speak on the record about it. But sources reached by Digital Transactions News indicate the launch is likely very soon. “It’s imminent, but the Fed is trying to orchestrate all the various PR outputs to ensure consistent information. I’d guess any day this week now,” notes Steve Mott, principal at payments consultancy BetterBuyDesign and a close observer of developments in real-time payments.
FedNow would compete with, but also likely connect to, other faster-payments systems, including the Real Time Payments service operated by The Clearing House Payments Co. LLC. That network, which TCH launched in 2017, has steadily added financial institutions and payments volume over the years as corporate customers and individuals begin to adopt the instant-payments option. Such systems have also taken root in other countries in recent years.
The launch of FedNow is the culmination of intense work the Fed has engaged in to prepare financial-services providers since announcing in 2019 it would build a real-time service. Last week, the top official at the Federal Reserve Bank of Cleveland outlined a course for FedNow that she said is likely to include a shift of time-sensitive volume to the new rail, particularly peer-to-peer payments.
