Fed to Raise Payment Services Prices 1.8%, but FedNow Unaffected

The Federal Reserve Board has announced price changes for 2024 that will raise the price for established, mature services by an average of 1.8%.

For the FedNow Service®, the fee schedule will remain the same as the previous year’s, inclusive of discounts, the Fed said in a Friday (Nov. 17) press release.

The new pricing will be effective Jan. 2, 2024, according to the release. The fee schedule is included in a Federal Register notice and will also be published on FRBservices.org.

The pricing will apply to payment services the Federal Reserve Banks provide to banks and credit unions, including the clearing of checks, automated clearing house (ACH) transactions, and wholesale payment and settlement services, the release said.

“By law, the Federal Reserve must establish fees to recover the costs, including imputed costs, of providing payment services over the long run,” the Fed said in the release. “The Federal Reserve expects to recover 103% of actual and imputed expenses in 2024, including the return on equity that would have been earned if a private-sector firm provided the services.”

Together with the 2024 pricing, the Federal Reserve announced four upcoming payment system enhancements.

First, Federal Reserve Financial Services (FRFS) will continue to simplify technology platforms and provide richer data and flexibility to its customers, according to an announcement on FRBservices.org.

Second, it is enhancing its services that can help customers detect anomalous payment patterns.

Third, FRFS is offering broad availability of its FedCash E-Manifest Service to add greater transparency and efficiency to the cash supply chain.

In another upcoming enhancement, the organization will build on the July launch of the FedNow Service to continue to maximize the accessibility of instant payments, according to the announcement.

“Federal Reserve Financial Services’ (FRFS) plans for 2024 reflect our continued strategic focus on providing customers with a fully integrated product suite that offers speed, resilience and choice,” the announcement said. “We are laser-focused on our mission of delivering a trusted and contemporary payment system that works for everyone.”

As of Oct. 3, the FedNow Service network has more than 100 institutions actively participating. They include 108 financial institutions sending and receiving on the network, 21 institutions providing liquidity and settlement services, and 20 service providers supporting payment processing in the instant payments infrastructure.