Federal Reserve to Launch , Instant Payments Service.
The U.S. Federal Reserve is set to launch "FedNow," a long-awaited system that will allow Americans to send and receive money instantly around the clock, Reuters reports.
The service has been in development since 2019.
Previously, cash transfers via the Fed took several days to settle.
Other countries, such as Brazil, India, the United Kingdom and the European Union, have been ahead of the U.S. with instant services for years, Reuters reports.
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FedNow will first launch with 41 banks and 15 service providers but will onboard more institutions later this year.
For us, FedNow really is a wonderful way of expanding reach, Anu Somani, head of global payables and embedded payments at U.S. Bank, via Reuters.
We want our clients to benefit from these capabilities, and we want that to be a competitive edge for us, Carl Slabicki, global co-head of payments for BNY Mellon’s Treasury Services, via Reuters.
Having the Fed in the space makes our members feel more comfortable that their needs will be met, that they will be treated fairly for pricing, Lance Noggle, senior vice president of operations and senior regulatory counsel at the Independent Community Bankers of America, via Reuters.
Consumers will not incur any charges when using FedNow, Reuters reports.
A maximum payment limit of $500,000 has been established, but banks can lower that cap if they'd like
