The Federal Reserve recently announced that the FedNow Service has experienced strong growth following its launch in July 2023, with 108 institutions now sending and receiving on the network. And 21 financial institutions provide liquidity and settlement services, and 20 service providers support payment processing in the instant payments infrastructure.
The Federal Reserve continues prioritizing service enhancements and plans to introduce new features and functionality in the coming months. The updates will include select risk management and operational improvements of the service geared toward providing additional fraud prevention tools and straightforward access to necessary account and transaction information.
The Federal Reserve is also planning to introduce a tech-centric developer resource soon, enabling financial institution participants to access documentation such as the recently updated operating procedures, technical specifications, and code and message samples to assist with service implementation.
With future enhancements underway, the value-added features were also introduced at launch to support early adopters from the onset, including a digital onboarding solution to help organizations and internal teams automate form signing and track progress through the entire onboarding process. The service also launched with fraud mitigation capabilities, including the ability to set negative lists and identify and investigate instances of fraud or errors.
What is the FedNow Service? The Federal Reserve Banks developed the FedNow Service to facilitate nationwide reach of instant payment services by financial institutions — regardless of their size or geographic location — around the clock, every day of the year. Through financial institutions participating in the FedNow Service, businesses and individuals can send and receive instant payments at any time of day, and recipients have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments. Access is provided through the Federal Reserve’s FedLine network. -which serves 9,000 financial institutions directly or through their agents.
KEY QUOTES:
“The momentum and interest we’re seeing in the FedNow Service in the weeks after launch reflects the noteworthy support from early adopters and underscores the changing U.S. payments landscape. We anticipate widespread adoption and ubiquity will build over time, bringing the benefits of instant payments to communities nationwide and improving the way households, businesses and governments send and receive payments.”
- Ken Montgomery, first vice president of the Federal Reserve Bank of Boston and FedNow program executive
“This is an exciting time, because it marks the beginning of our ongoing enhancements to the FedNow Service. Instant payments are a strategic offering for any financial institution or service provider, so we want to make them as accessible as possible.”
- Nick Stanescu, senior vice president and FedNow business executive
