The Federal Reserve has updated its timeline on the launch of its instant payments FedNow Service. The updated timeline puts a launch date in mid-2023 and comes as the FedNow Pilot Program has entered technical testing.
“Today, with the FedNow launch date in sight, we are pleased with the collaboration and dedication our pilot participants have brought to advance modern payments in America,” said Esther George, president and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow program.
Currently, more than 120 organizations are participating in the FedNow Pilot Program. Recent newcomers include U.S. Bank, Exchange Bank and several payment processors and solution providers.
The FedNow Service will be accessible to financial institutions of any size, helping broaden the reach of instant payments nationwide. According to the Fed, financial institutions participating in the service will be able to provide businesses and consumers with the ability to send and receive instant payments efficiently and securely. As a benefit of the instant payment, recipients will have full access to funds immediately, giving them greater flexibility to manage their money and make time-sensitive payments.
“The benefits of instant payments are increasingly important to consumers and businesses, and the ability to provide this service will be critical for financial institutions to remain competitive,” said Ken Montgomery, Federal Reserve Bank of Boston first vice president and FedNow Service program executive. “Next year, financial institutions will be able to use the FedNow Service as a springboard to provide innovative solutions to their customers.”
Participants in the FedNow Pilot Program will complete a certification process to ensure operational and messaging readiness and then move into production once the service is launched. As the pilot program moves through the testing phase, the Fed will begin to engage non-pilot financial institutions and service providers interested in being early adopters of the service.