After almost two years, the Federal Reserve has finalized its rule for its FedNow Service, a new interbank 24/7/365 real-time gross settlement service designed to support instant payment within the United States.
Following the Aug. 6, 2020, public notice, the Fed received over 180 comments from the public, including interested parties and industry professionals and groups. The Fed incorporated some of the public comments into development of the final rule.
Through financial institutions’ participation in FedNow Service, businesses and individuals can send and receive payments instantaneously, and recipients will have full access to funds immediately, offering greater flexibility to manage money and make time-sensitive payments.
The FedNow Service will provide choice in the market for clearing and settling instant payments as well as promote resiliency through redundancy. Financial institutions and their service providers will be able to use the service as a springboard to provide innovative instant payment services to customers.
FedNow Service is expected to be available in 2023. The rollout will be completed in phases so that feedback can allow for modifications and adjustments in response to industry needs and technology changes.