What is the FedNow® Service, and what opportunities does it offer?

The FedNow Service is the Federal Reserve’s instant -payment infrastructure that launched in July 2023. It provides participating US financial institutions of all sizes the opportunity to build and offer instant- payment services—either on their own or with the help of service providers—to individuals and business customers.

Unlike many of the consumer-facing faster and mobile payment services in the market today, the FedNow Service operates between financial institutions to clear and settle all payment transactions immediately on a transaction-by-transaction basis, reducing credit risk for financial institutions and giving end-users immediate access to funds.

Through FedNow Service, participating financial institutions, individuals, and businesses can instantly send and receive money around the clock any day of the year. This can provide substantial benefits in cases in which rapid access to funds is critical or when just-in-time payments help manage cash flow. For example,

• Workers completing their shifts can have access to their wages immediately after payroll funds are deposited into their accounts.
• Insurers, government agencies, and emergency relief organizations can instantly disburse funds to people impacted by a natural disaster.
• Small businesses can use instant proceeds from sales or services to ensure steady cash flow and avoid the costs of short-term credit.
• Parents can immediately send funds to children, who could then use those funds to immediately pay a bill and avoid a late fee.
• Account holders can move funds from a brokerage or retirement account to a checking account with no delay in accessing transferred funds.

The Federal Reserve collaborated with the payment industry to build the FedNow Service, and while the service has already gained momentum and excitement, the launch is just the beginning. Our goal and expectation is that the FedNow Service will achieve broad reach over time.

We plan to continue partnering with the industry to grow the network of financial institutions participating in the FedNow Service and to broadly reach American consumers and businesses to help take advantage of the benefits of instant payments. For a list of participating financial institutions currently live on the service, visit FRBservices.org.

We also plan to implement frequent, iterative updates as well as large-scale enhancements to the service to continue supporting safety, resiliency, and innovation in instant payments as the FedNow Service network expands.

There are a lot of resources available on the FedNow Explorer website to help financial institutions and other organizations prepare for the FedNow Service, including a service provider showcase that allows financial institutions to find and connect with providers that can help them implement the service. Federal Reserve relationship managers are also available to help every step of the way.