Faster Payments

Fed Launches FedNow Community For Instant Payments, Seeks Participants

The Federal Reserve has formed a FedNow Community group for its upcoming instant payment offering, the FedNow Service, and needs volunteers to support it, the Fed announced Wednesday (May 6).

The Fed acknowledged the challenges brought on by the coronavirus but noted the FedNow Service is still scheduled to be unveiled in 2023 or 2024.

“While we work to support the industry and our customers during this difficult time, we want to ensure that our collaboration with industry stakeholders on FedNow features and functionality continues on a virtual basis,” said Kenneth C. Montgomery, Federal Reserve Bank of Boston first vice president, in a statement. “The FedNow Community will help influence FedNow Service design and our development roadmap by providing input on desired service features, technology and implementation plans.”

Last summer, PYMNTS reported the FedNow initiative was expected to speed up the time it takes to process paper checks, inching the U.S. toward faster, digital payments.

“Immediate access to funds could be especially important for households on fixed incomes or living paycheck to paycheck, when waiting days for the funds to be available to pay a bill can mean overdraft fees or late fees that can compound,” said Federal Reserve Governor Lael Brainard at the time.

The service promises to incorporate the clearing functionality into the process of settling each payment, allowing financial institutions to exchange the information needed to make debits and credits to customer accounts and notify customers of completed or failed payments.

The Fed said it seeks participation from organizations that will represent the key constituents of the FedNow ecosystem. It is open to anyone interested in volunteering time and expertise to contribute to the success of FedNow. Interested individuals can apply online. Applicants are asked to detail their experience, expertise and their organization’s role in faster payments.

As it develops the FedNow Service, the Fed will call upon the group — either the entire membership or specific members with needed expertise — to provide insights.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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