Federal Reserve Banks Set Timeline for Launch of FedNow Service
The Federal Reserve Banks plan to launch the FedNow service between May and July 2023.
The new timeline comes as the FedNow pilot program enters technical testing of the service starting in September. Currently, approximately 120 organizations are participating in the FedNow pilot program. When operational, it will be accessible to financial institutions of any size in any geographic location.
“Today, with the FedNow launch date in sight, we are thrilled with the collaboration and dedication our pilot participants have brought to advancing modern payments in America,” Esther George, President and CEO of the Federal Reserve Bank of Kansas City and executive sponsor of the FedNow program, said.
The FedNow service is being developed to facilitate national reach of instant payment services by financial institutions 24 hours a day, every day of the year. This means businesses and individuals can send and receive instant payments anytime, while recipients will have immediate access to funds. Access will be provided through the Federal Reserve’s FedLine network, which serves more than 10,000 financial institutions directly or through their agents.
“The benefits of instant payments are increasingly important to consumers and businesses, and the ability to provide this service will be essential for financial institutions to remain competitive,” said Ken Montgomery, senior vice president of the Federal Reserve. Bank of Boston and director of the FedNow Service program. “Next year, financial institutions will be able to use the FedNow service as a springboard to deliver innovative solutions to their customers.”
Participants in the FedNow pilot program will go through a certification process to ensure operational and messaging readiness. Then they will go into production once the service is launched.