July 21, 2023

FedNow launches

digital dollarThe Federal Reserve Thursday announced its FedNow Service is live. “Banks and credit unions of all sizes can sign up and use this tool to instantly transfer money for their customers, any time of the day, on any day of the year,” the Fed said in its release.

NAFCU has long supported the Fed’s involvement as an operator of a new, real-time payments rail. The association will continue to advocate for development of robust risk management tools, safeguards, and end-user features to promote FedNow adoption.

"The Federal Reserve built the FedNow Service to help make everyday payments over the coming years faster and more convenient," said Federal Reserve Chair Jerome Powell. "Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid."

The Fed released the list of early adopters at the end of June; at launch, 35 banks and credit unions, as well as the Treasury Department’s Bureau of Fiscal Service, were equipped with instant payments capabilities. There are 16 service providers supporting payment processing.

In addition to instant payment capabilities, FedNow also includes optional features, including:

  • fraud prevention tools;
  • the ability to join initially as a receive-only participant;
  • request for payment capability; and
  • tools to support participants in their handling of payment inquiries.

Additional features and service enhancements will be introduced over time.

NAFCU has a webpage dedicated to assisting credit unions prepare for the FedNow launch, and is also seeking feedback from credit unions that have already used FedNow; submit a statement today.