FedNow, the Federal Reserve’s instant payment system, is now live and already has 35 banks and credit unions signed up.
Banks and credit unions can use the system to instantly transfer money, with JPMorgan Chase, BNY Mellon and the US Department of the Treasury’s Bureau of the Fiscal Service all early adopters, alongside 35 other institutions.
In addition, 16 service providers are also ready to support payment processing for banks and credit unions.
The instant payment system means individuals can receive their paychecks and immediately use them the same day. Businesses will also be able to avoid processing delays, helping to manage cash flows.
As more organizations sign up, their customers will be able to use their institution’s app or website to send instant payments.
The Independent Community Bankers of America (ICBA) has advocated for the introduction of the system for several years, and commended the Federal Reserve for the launch.
Rebeca Romero Rainey, ICBA president and CEO, said: “With the market for faster payments growing rapidly, FedNow marks a significant opportunity for community banks to adopt faster payments products and services as they continue to evolve their strategies and solutions to best serve their customers — all while offering the personalized approach to banking for which they are known.”
The American Banks Association (ABA) compared the new system to The Clearing House’s Real-Time Payments (RTP), which launched in November 2017.
Rob Nichols, president and CEO of the ABA, said: “With The Clearing House's RTP system already in operation, the arrival of FedNow means there are now two real-time payments options available to choose from. Fully realizing the benefit of these new rails will require the Fed to work hard to encourage interoperability between the systems.”