FedNow, which will be fully implemented by 2023, will let individuals and companies transfer funds between accounts, pay bills and send or receive money from friends or family. The services will be near-real time and be available any day or time of the year.
The instant payments are differentiated by the speed at which they can be doled out as compared to traditional payment methods. While some traditional methods appear to go through within seconds, they actually end up taking several days to go through and actually become available for the user, the report stated.
First Republic Bank, Tri Counties Bank, Silicon Valley Bank, Pacific Coast Bankers’ Bank and First Foundation Bank will be the banks testing the program, while CUs participating are Excite Credit Union, Farmers Insurance Federal Credit Union and Star One Credit Union, according to the report.
FedNow is set to be released in phases, the report stated, and the first release will come with fraud prevention tools, the ability to join instantly as a receive-only participant, request for payment capability and tools to support participants in the way they handle payment inquiries. And Reserve Banks will have a liquidity management tool on offer.
Like with other Federal Reserve services, the FedNow program will be available for depository institutions eligible to hold accounts at its 12 Reserve Banks and 24 branches around the country. The goal of the program is to expand equitable access to the instant payment system to over 10,000 depository institutions or their agents in the U.S., according to the report.
In Europe, immediate gratification with payments is becoming more common, with BNP Paribas announcing it will be partnering with Token to make account-to-account (A2A) payments possible.
