Fed to Develop New Real-Time Payment and Settlement Service

The Federal Reserve Board announced Monday that the Federal Reserve System will develop a new round-the-clock real-time payment and settlement service, called the FedNow Service, to support faster payments. 

“The rapid evolution of technology presents a pivotal opportunity for the Federal Reserve and the payment industry to modernize the nation's payment system and establish a safe and efficient foundation for the future,” the released said. “The Federal Reserve believes faster payment services, which enable the near-instantaneous transfer of funds day and night, weekend and weekdays, have the potential to become widely used and to yield economic benefits for individuals and businesses by providing them with more flexibility to manage their money and make time-sensitive payments, it continued.”

In 2018, the Board requested public comment on potential services that could be developed by the Fed to support faster payments. Of the more than 350 comments that took a position on whether the Fed should develop a new service for faster payments, over 90 percent supported the Fed operating a round-the-clock real-time payment and settlement service alongside services provided by the private sector.

The Board is now requesting comment on how the new service might be designed to most effectively support the full set of payment system stakeholders and the functioning of the broader U.S. payment system. The Fed’s notice in the Federal Register is available here.  Its FAQs is available here.

The Board anticipates the FedNow Service will be available in 2023 or 2024.