After years of development, the Federal Reserve has finally announced that it will launch its instant payment service, FedNow, in July. This move is expected to revolutionize the way consumers and businesses transfer money across the United States.
According to the Federal Reserve, FedNow will enable immediate payments, making it possible for money to be transferred between bank accounts within seconds, 24/7, 365 days a year. The service will operate alongside existing payment systems, such as ACH and wire transfers, and is expected to provide a more efficient and secure payment option for Americans.
FedNow is part of the Federal Reserve's strategy to modernize the country's payment system and make it more inclusive. Currently, many Americans rely on cash or checks for their transactions, which can be slow and inconvenient. With FedNow, the Federal Reserve hopes to provide a faster and more reliable payment option for everyone.
The launch of FedNow has been highly anticipated, with many financial institutions and businesses eager to take advantage of its benefits. According to TD Cowen analyst, Jaret Seiberg, "FedNow will represent a material change in how consumers use electronic money." He added that the service could also lead to lower fees and greater competition in the payments space.
The Federal Reserve has said that it will initially launch FedNow with a pilot program, which will involve a limited number of participants. Formal certification of participants for the service is expected to begin in 2023, with full implementation by 2024.
The launch of FedNow is expected to have a significant impact on the payments industry, with many players looking to capitalize on the new service. One such player is the leading B2B digital payments platform, which has been a FedNow showcase participant, providing its capabilities to financial institutions.
In addition to this, blockchain operator Tassat has announced that it will provide access to the FedNow payment system. This move is expected to enable Tassat's clients to use FedNow for real-time payments, thereby increasing efficiency and reducing costs.
The launch of FedNow has also been the subject of much speculation, with rumors of delays and technical issues. However, the Federal Reserve has reassured the public that the service is on track and will launch as planned in July.
The launch of FedNow has been classified as "Popular" as it is a highly anticipated and widely discussed topic in the financial industry. It is also relevant to the general public, as it is expected to provide a faster and more convenient payment option for everyday transactions.