July 20, 2023
FedNow – now up and running.
The Federal Reserve announced the new instant payment system called fed now is now up and running. 35 early adopting banks and credit unions as well as the US Department of Treasury’s Bureau of Fiscal Service are already on board.
I told you all about how FedNow works in this video back in April. It’s pinned on my page. I highly encourage you to watch it.
But the short short version is — FedNow is system. It’s not a currency. You do *not* sign up for FedNow. Your bank does. It’s a way for banks who qualify to talk to each other and the federal reserve in real time – to facilitate three things — instant transaction settlements, 24-7-365 available transfers and instant payment confirmation for both the sender and the recipient. Fed now is a big deal because it’s the first and only digital instant-payment system created and backed by the us government.
So what does FedNow do for you? It processes your payments in real time, one-by-one as opposed to how they’ve been processed in the past… in bulk at specific times and on specific days. This real time processing dramatically increases the speed that money moves from you to your payees and from payees back to you.
Basically, if your bank uses FedNow you would no longer have to wait a few business days or wait till a holiday or weekend is over to get your money. It’s there instantly. And if you’re trying to pay a bill – you can pay it immediately, as long as the money is in your account.
As I said as of today — 35 institutions, the Department of the Treasury’s Bureau of the Fiscal Service and 16 service providers are up and running with FedNow. But it will likely take a while for most banking institutions to join the network and offer real time payment services to customer. The early adopters include JP Morgan Chase, Wells Fargo, and US Bank to name a few.
Read more about the 35 early adopter banks here.
Read more about FedNow here.
