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The launch of FedNow: Fast cash or fast fraud?
With the launch of FedNow, which will enable every financial institution in the U.S. to offer a modern instant payment solution (should they partake), it’s important to consider some of the lessons learned from other countries, like Brazil’s instant payment system, Pix, which launched in 2020 and transformed the way individuals and businesses transact money, and UPI in India.
Similar to FedNow, Pix and UPI were created to modernize the economy by reducing cash transactions, offering an alternative to existing payment systems, and allowing for faster and more affordable transactions with real-time payments. According to recent data, over 130 million individuals used Pix in the last few months, and that number accounts for nearly two-thirds of the population. In addition, Pix currently processes north of $100 billion in payments, driving down ATM and bank withdrawals by 25 percent since 2002.