FedNow Pilot Brings New Features, Use Cases for Instant Payments in '23 and Beyond
Round-the-clock, real-time payments often are credited to the Venmos and PayPals of the world. But next year, the nationwide introduction of the Federal Reserve’s FedNowSM Service will offer 24/7/365 funds availability to help all types of financial institutions move beyond the person-to-person (P2P) use cases that FinTechs popularized.
The FedNow Service will broaden access to instant payments features and use cases by clearing and settling payments between financial institutions around the clock every day in a Federal Reserve Bank master account. This always-on instant payments functionality also reduces interbank credit risk and liquidity risk for participant institutions, increasing the appeal of current and new use cases.