The U.S. Federal Reserve on Wednesday (March 31) released message specifications for its instant payment service, FedNow. Set by the International Organization for Standardization, or ISO, these specifications set the message flows and formats for when the service begins operating in 2023.
The Fed said in a news release that this is a key step, allowing financial institutions (FIs) and other payment providers to “begin preparing systems and developing solutions” to help support the program.
“Our work with payments industry stakeholders revealed unanimous support for developing our messaging specs in alignment with the ISO 20022 messaging standard to enable broad interoperability, end-to-end efficiency of payments and future innovation on top of the FedNow platform,” said Nick Stanescu, senior vice president and FedNow business executive. “Our adherence to the ISO 20022 standard means more opportunities for implementation across products and market segments.”
ISO 20022 is an international standard for messaging that allows for data exchanges, efficient end-to-end straight-through payment processing and interoperability with other payment systems, the news release said.
The Federal Reserve also collaborated with The Clearing House to optimize compatibility between payment services, which will likely share common users. Individual FedNow message flows and implementation guidelines have also been approved by experts on the FedNow Community ISO 20022 Working Group and other industry participants, including those from BNY Mellon.
PYMNTS reported last year on the planned launch of FedNow, which included 110 participants in its pilot program, such as marquee FI names like J.P. Morgan, Citi, Goldman Sachs, Wells Fargo and several regional players. Providers include Volante Technologies, Jack Henry and FinTechs such as Finzly.
To learn more on this phenomenon, read PYMNTS’ 2020 report Digesting the Payments Modernization “Elephant” Bite by Byte, as well as our look at the RTP network.
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